Starbucks to fire thousands as quarterly profit falls 69%

Starbucks Corp. said nearly 7,000 employees may lose their jobs because of a new round of store closures and cost cuts as it reported Wednesday that its profit dropped 69% in its fiscal first quarter.

The company plans to close 300 underperforming stores around the world by the end of the fiscal year in addition to the 600 it already planned to close in the U.S. The company has already closed 384 of those stores.

The additional closures could result in the loss of 6,000 in-store jobs. Starbucks also plans to lay off about 700 nonstore employees.

It also has reduced the number of 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 reported net income of $64.3 million, or 9 cents a share, down from $208.1 million, or 28 cents, a year earlier. Revenue fell to $2.62 billion from $2.77 billion.

The revenue drop stemmed from a 9% decline in same-store sales -- revenue at locations open at least a year -- considered a key gauge of restaurant and retail performance. That dip was worse than the company’s fourth-quarter decline of 8%. U.S. same-store sales fell 10% in the first quarter.

The company said it planned 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 26 cents to $9.39 in after-hours trading after rising 50 cents during regular trading Wednesday.