Journalists got their hands on an email sent by chairman and newly returned CEO Howard Schultz to Starbucks employees. The Wall Street Journal also reported another interesting development: On Tuesday, Starbucks will close all company-operated stores in the U.S. from 5:30 p.m. to 9:30 p.m. (Mark your calendars, coffee junkies.) In that time, Starbucks will train 135,000 employees to sling better espresso drinks. At least that's good news (other than the early closures that one day).
I can't help pondering the big picture here, though. I don't remember ever hearing of job cuts at Starbucks; that seems like news from the Bizarro World. However, elsewhere in the economy, a litany of companies have begun reducing their headcounts: Sprint-Nextel (NYSE: S), Macy's (NYSE: M), scads of financial companies embroiled in the subprime mess (the latest rumors involve Lehman Brothers (NYSE: LEH) and Merrill Lynch (NYSE: MER)), and even formerly happy-go-lucky Yahoo! (Nasdaq: YHOO), to name just a few.
Just do a Google News search on "cut jobs," and you'll reap quite a collection of results. Some of the recent corporate cuts may sound small — a couple hundred here and there — but the building effect of it seems to fly in the face of some pundits who've insisted that the economy's troubles are overrated. It seems that unemployment troubles aren't just affecting a couple of specific industries; the slow and not-so-slow leaks of jobs emanate from all walks of life (just like problem debt and the credit crunch).
Here at the Fool, we believe in long-term investing. We know that even if things are tough in the short term (slowdowns and recessions are inevitable, given the cyclical nature of the economy), the long term is bright. To us, beaten-down stocks in quality companies represent great opportunities. However, Starbucks' news today makes me think that for the short term, anyway, misery will love company for a while yet.
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