Starbucks Corp. said yesterday that it will eliminate about 6,700 jobs because of the difficult economy.
The company becomes the latest to announce job losses and joined major employers such as AOL and Boeing yesterday in detailing layoffs to cope with the current recession.
Starbucks said its profit dropped 69 percent in its fiscal first quarter, to $64.3 million. Starbucks said it will close 300 underperforming stores in addition to the 600 it already planned to close in the United States. The company had planned to open 200 stores in the United States but will scale back to 140.
Starbucks said the closings and other "labor efficiencies" could cost as many as 6,000 jobs. The company will also lay off 700 employees who work outside the stores. Starbucks officials did not say which stores will close.
Starbucks, which transformed American coffee into a custom-made beverage that sold for a premium, has been having problems as a tough economy forced even the caffeine-addicted to rethink their habits. It recently announced such cost-saving moves as limiting preparation of decaffeinated coffee in the afternoons.
Yesterday's layoffs seem a typical response by pressured companies reporting tough finances. Others, including Caterpillar, retail giant Target, consumer electronics firms and Home Depot, have announced layoffs.
Boeing Co. said it will cut 10,000 jobs, or more than 6 percent of its work force, after a strike and program delays led to a fourth-quarter loss and a global recession eroded demand for aircraft. That loss includes 4,500 job cuts previously announced.
Time Warner Inc.'s AOL subsidiary said it is cutting up to 700 jobs, or about 10 percent of the Internet unit's work force, to cut costs.
AOL chief executive Randy Falco told employees in a memo yesterday that AOL plans to cut the jobs in the next several quarters, and that it hopes to have any U.S.-based cuts completed by the end of March. He also said AOL will skip merit pay raises in 2009. AOL owns Baltimore-based Advertising.com.
"Reducing our work force is never easy, particularly in the current climate, but our goal in doing this is to provide our core businesses the resources they need to thrive," Falco said.
These "core businesses" are AOL's "Platform A" advertising unit, "MediaGlow" publishing unit and "People Networks" social media unit.
The Associated Press contributed to this article.