Starbucks Resorts to Workforce Reductions in Restructuring Effort

(NewsVisual, powered by IntellectSpace) -- As part of its initiative to transform the company, Starbucks Corp (NASDAQ: SBUX) announced on Thursday the layoff of 200 employees, with a total of 600 positions being eliminated.

The announcement came in the form of a personal email from CEO/President/Chairman Howard Schultz to all of the retail-coffee giant’s 170,000 “partners” (employees) worldwide.

The tone of the email, a copy of which appears on the company’s website, is clearly pained.  In fact, Mr. Schultz termed it “my most difficult communication to date.”

He then went on to offer Starbucks’s partners a straightforward but solemn explanation of the reasons for the dismissals.

“Over the last several weeks, we conducted a thorough organizational analysis, which was, at times, very emotional and extremely stressful,” Schultz said in the email.

“But as I sit at my desk and think about my responsibility to over 170,000 partners and their families who rely on me and others to preserve and enhance our company, I know that I am responsible for ensuring the success of the company for the long term, which means that difficult decisions must be made.  Personally, I continue to struggle with the outcome, because I realize how painful it will be for some partners,” he added.

In addition to its workforce restructuring, the company said that it was expanding its geographic divisions in the U.S. from 2 to 4 in order to enhance efficiencies.

The new divisions are: Western/Pacific, Northwest/Mountain, Southeast/Plains and Northeast/Atlantic, the statement said.

On Friday, the markets responded to the company’s announcement favorably, sending its share price up from the previous close of $17.83 to $17.90 in afternoon trading (2:13pm ET).

NewsVisual created an IntellectSpace Knowledge Map of Schultz’s noteworthy business connections.

The Knowledge Map shows that beyond Schultz’s ties to Starbucks, he has also served as a Director at a number of companies, including DreamWorks Animation, Ebay, and Drugstore.com.

Click here for an interactive version of this IntellectSpace Knowledge Map.

(Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).