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Originally published Tuesday, July 29, 2008 at 12:00 AM

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Starbucks cutting 180 Seattle jobs as it trims 1,000 non-store positions nationwide

Starbucks is cutting about 180 jobs in Seattle as part of a companywide reduction of 1,000 non-store positions. The local job cuts come...

Seattle Times business reporter

Starbucks is cutting about 180 jobs in Seattle as part of a companywide reduction of 1,000 non-store positions.

The local job cuts come at Starbucks' headquarters and Northwest regional office south of downtown Seattle.

About 550 people will be laid off across the company, and about 450 positions will be eliminated through attrition. The cuts span the company, from human resources to global finance, information technology, marketing, global supply chain, global store development and non-store positions in retail operations.

Starbucks also said that about 700 of the roughly 1,000 in-store workers affected by the closure of 50 U.S. stores this month have been reassigned to other stores.

Jim Alling, who led Starbucks' blockbuster U.S. growth before being assigned to run its international operations last September, will leave the company after working there 11 years. He is replaced by Martin Coles, who became chief operating officer in September but will drop that title and return to his former job as head of international.

Wall Street welcomed the news, sending Starbucks shares up 82 cents, or 5.8 percent, to $15.05 with about 90 minutes of trading to go.

The stock has traded as low as $13.33 in recent weeks, lower than it had been in almost five years.

The company is struggling with falling profits and declining traffic at U.S. stores. Its second-quarter profit fell 28 percent, and Starbucks expects an earnings drop for the year. It releases its third-quarter profit report tomorrow.

In other executive shifts, Senior Vice President Michelle Gass will lead marketing, food and beverage for Starbucks; Executive Vice President Dorothy Kim replaces Gass in the office of the CEO; and Peter Gibbons was promoted to Kim's former position as executive vice president of global supply chain operations.

Microsoft public relations executive Vivek Varma will become senior vice president of Starbucks' public affairs department on Sept. 8.

Starbucks cut 600 positions in February, about 220 through layoffs. Many of the cuts and about a third of the layoffs were at its corporate headquarters. Last month, the company laid off 100 workers in store development, including 25 at its Seattle headquarters.

Starbucks now employs about 3,500 people at its corporate headquarters. It had 172,000 employees worldwide at the end of September.

Thousands of workers will be affected by the closure of 616 stores in the U.S. and 61 in Australia. Starbucks has said it will try to find jobs at other stores for 12,000 workers affected in the U.S., but it is laying off 685 people in Australia.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

Copyright © 2008 The Seattle Times Company

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