Coffeeshop giant Starbucks has announced it will cut around 6,700 jobs and shut 300 stores as it reported a 69% plunge in quarterly profit.
Starbucks has struggled as hard-up consumers forego expensive lattes and frappucinos as the recession bites.
It said it made a net profit of $64.3m in the 13 weeks to December 28, down from $208.1m a year ago.
Two-thirds of the store closures will be in the US and they come on top of the 661 closures announced in 2008.
Starbucks is the latest multinational company to announce massive layoffs. Earlier on Wednesday, Boeing said it would cut 10,000 jobs.
In a letter to employees, chairman and chief executive Howard Schultz said that the company was working hard to “navigate the deteriorating global economy”.
“These decisions have been made to ensure the company is leaner and prepared to endure a worsening economic climate,” he told staff.
“The financial crisis is affecting almost almost every company in the world.”
Starbucks’ revenue fell 6% to $2.6bn driven by 9% fall in sales in established coffee shops.
But Starbucks’ problems are not just down to the economic downturn.
Mr Schultz has admitted that the firm over expanded, devaluing its upmarket image.
Starbucks has further been hit by the likes of McDonald’s and Dunkin’ Donuts greatly improving the quality of their own coffee, which is generally also cheaper.