Busting up a Starbucks.

In the midst of what most people refer to as "this economy," I saw the news today that Eastman-Kodak, Boeing and Starbucks were letting thousands of people go. In Kodak's case, they're the victim of the digital age, and it's been a struggle for them over the past 10 years, but times change and if companies don't change, bad things happen.

In the case of Starbucks, they're closing 600 shops - which should drop them down to about 15,500. According to their web site, "The stores identified for closure are spread across all major U.S. markets with approximately 70 percent of them opened since the beginning of fiscal 2006."

The people running Starbucks are supposed to be a lot smarter than you or I (at least I) and I'd assume that they've heard all the jokes about a Starbucks being across the street from another Starbucks. I'm sure they have because they embrace the policy, saying that their customers prefer "same side of the street" service in cities. The joke is on them, as it were.

As a result of that market saturation, when times are tough, the "under-performing stores" have to be eliminated, and the employees who are probably not under-performing, are let go. That's where the difficult part comes in.

This statement came from CEO Howard Schultz on September 20, 2006:

Speaking at an interview in New York, the Seattle-based coffee giant's chairman, Howard Schultz, said: "The saturation opportunity in the U.S. is not 50% there."
Mr. Shultz said the group has a target of operating 30,000 stores internationally; it currently operates over 12,000 stores across 37 countries, with 70% located in the US.

But enough about Starbucks for now.

At work, I oversee the duties of a contractor that we pay to provide an essential service that benefits the safety of our customers. Last week, one of the contractors' workers made a mistake that potentially could have caused a major disaster. It didn't but it could have. When the mistake was discovered, I was instructed by my supervisor to call the contractor and tell them that the person responsible for the error would have to be removed from the job - essentially fired, because we have no other job for him.

Even though I didn't have to personally fire the guy, I felt badly having to call his supervisor and have him fired. For all I know, the guy has a family to support and it isn't the easiest thing in the world to find a job these days.

If it were up to me, I'd have taken the guy aside and spoken to him like an adult and asked him what the circumstances were surrounding his decision and whether or not he had learned anything - essentially getting an idea of whether or not he had any remorse over his actions and then I would have offered him additional instruction so as to avoid a repeat of a similar incident.

But, he was fired.

I guess I'm not as cold-hearted as I let on sometimes, and even though I had nothing to do with either his hiring or the mistake he made, I'm really happy that I wasn't the one who had to tell him he was being let go.

That said, how do the people running Starbucks feel about closing 600 shops? The very same shops that their expensive educations told them were a good idea no less than 3 years ago. In a sense, their mistake in judgment put over 4,000 people in jeopardy because the idea of flooding the market with expensive coffee shops is (a) risky because coffee isn't something that is hard to find and (b) kind of silly to someone who doesn't drink coffee and finds the whole Starbucks concept kind of ridiculous.

At the bottom of Starbucks' announcement of the store closings, this "forward-looking statement" appears:

Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup.

I'm guessing that they still don't get it. The guiding principles are what got them where they are, which right now makes a share of Starbucks' stock at about the same price as a cup of their coffee.