Coffee chain Starbucks announced Tuesday it would shut down most of its Australian stores within a week. The company said it would close 61 "underperforming" stores from a total 84 in Australia because it was refocusing on the major cities of Sydney, Melbourne and Brisbane and surrounding areas."This decision will result in the closure of 61 underperforming locations throughout the country by August 3," the company said. Media reports estimate the number of lost jobs will be about 685. Earlier in July, Starbucks announced the closuure of 600 stores in the U.S. in response to a slowdown in the American economy, where high fuel prices and a credit crunch are forcing consumers to tighten their belts.
Starbucks chairman Howard Schultz said the firm had developed a transformation plan in January that led to the "difficult but necessary" decision to close stores in Australia. He said in a statement the decision to shut the stores reflected problems specific to the country and did not reflect "the strong state of Starbucks business in countries outside of the United States." He added, "There are no other international markets that need to be addressed in this manner."
There are also rumors of corporate layoffs at the company. An anonymous poster on the site starbucksgossip.com wrote Monday that "mass layoffs of district managers and regional directors are happening today in the U.S." Another person wrote anonymously, "I was a regional coordinator and I had the dreaded meeting with my director this morning. The regional director level got the axe last week, today is support staff, and I'm told tomorrow is the district managers. At least where I am. Our regional office is also closing."
Starbucks is scheduled to release its third-quarter financial results tomorrow. Last quarter the firm's profits had fallen 28 percent. (Sydney Morning Herald)
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