Starbucks Profit Drops 69 Percent; 7,000 Jobs Will Be Cut

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NEW YORK (AP) — Starbucks Corp. plans to slash nearly 7,000 more jobs during a new round of store closures and other cuts, the company said as it reported Wednesday that its profit dropped by more than two-thirds in its fiscal first quarter.

The gourmet coffee chain plans to close 300 underperforming stores around the world — including 200 in the U.S. — by the end of the fiscal year in addition to the 600 U.S. stores it began closing this summer.

The new store closures could result in the loss of 6,000 jobs, but the company said it will try to offer employees transfers to other nearby locations.

Starbucks also plans to lay off about 700 non-store employees and has reduced the number of new stores it plans to open.

The cuts and changes will result in about $500 million in savings in fiscal 2009, the company said.

The company said it plans to open only 140 new stores in the U.S. in fiscal 2009, down from its previous target of 200. Overseas, it will open 170, down from the 270 it had planned to open.

Shares fell 24 cents to $9.41 in electronic after-hours trading after rising more than 5 percent during regular trading Wednesday.

This program aired on January 28, 2009. The audio for this program is not available.