Companies serve up thousands more layoffs

NEW YORK - Starbucks Corp., Allstate Insurance and Boeing joined the growing list of companies annoucing massive layoffs Wednesday in the wake of tumbling earnings reports.

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

Allstate Corp., the largest publicly traded U.S. home and auto insurer, said it would cut 1,000 jobs after reporting a fourth quarter net loss of $1.13 billion. It is the Northbrook company's first annual loss as a public firm.

And Chicago based Boeing Co. said it plans to cut 10,000 jobs after reporing a net loss of $56 million.

Starbucks 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. No locations were announced.

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

It also has reduced the number of new stores it plans to open.

The cuts and changes will result in about $500 million in savings in fiscal 2009, the company said.

Edward Jones analyst Jack Russo said the cuts make sense given the decline in Starbucks' sales in recent quarters.

"This is going to be a transition year," Russo said. He said the company will have to "claw their way back."

Wall Street had largely expected Starbucks to report dismal performance for the quarter, which ended Dec. 28, because it had warned last month that slow sales likely would cause it to miss analysts' estimates.

Heeding the company's warning, analysts lowered their average expectation from 22 cents per share to 17 cents per share.

But the company still fell short, with net income of $64.3 million, or 9 cents per share, down from $208.1 million, or 28 cents per share a year earlier.

Excluding charges from closing the 600 U.S. stores and 61 stores in Australia, the company said it earned 15 cents per share in its first quarter.

Revenue fell to $2.62 billion from $2.77 billion, while analysts had predicted revenue of $2.70 billion.

Starbucks also said its Chief Executive Howard Schultz will be paid just $10,000 in base salary for fiscal 2009, including health insurance and other benefits. His salary was $1.2 million in 2008.

Schultz still could take home more compensation in the form of stock options. In the last fiscal year, he received stock options worth $7.8 million when granted, which helped boost his total compensation near $10 million.

Allstate Corp., reported a fourth-quarter net loss of $1.13 billion, or $2.11 a share, which compares with a profit of $760 million, or $1.36 a share, in the same period a year earlier, the company said in a statement. Excluding the declines in the value of some holdings, Allstate earned 97 cents, missing the $1.35 average profit estimate of 18 analysts surveyed by Bloomberg.

The job cuts represent about 2.6 percent of the staff, based on 38,000 employees at the end of 2007, according to the firm's most recent annual report.

Boeing Co. said its 10,000 job cuts amounts to more than 6 percent of its workforce and comes after in a year marked by a labor strike and program delays. The job reductions include 4,500 that were previously announced.

Boeing expects an increase in canceled or deferred orders this year as airlines cope with a drop in travel demand and tight credit. Almost a third of the world's carriers are likely to defer deliveries this year, up from 8 percent three months ago, a survey released last week by UBS Investment Research showed.

The 5,500 new job cuts announced today will be spread out over the year, with emphasis on the first half, and will come from support services, corporate positions and the defense side of the business, The planemaker's fourth-quarter net loss was 8 cents a share, compared with net income of $1.03 billion, or $1.36, a year earlier. Sales decreased 27 percent to $12.7 billion.