Starbucks (SBUX) told employees it may not be able to match their contributions to 401(k) retirement accounts next year as it tries to keep costs down.
NEW YORK — Starbucks told employees it may not be able to match their contributions to 401(k) retirement accounts next year.
The gourmet coffee chain said that, to keep costs down, it will switch from matching contributions at a fixed rate and will instead decide whether or not to match an employee’s contributions.
The Seattle company currently matches between 25 percent and 150 percent of the first 4 percent of workers’ pay. The percentage depends on how long an employee has worked at the company.
Starbucks said if it does make a match next year, it may be at a different percentage than in 2008.
Most Read Business Stories
- 55,000 in Washington state may have to pay back thousands in jobless benefits
- Boeing made an entire fake neighborhood to hide its bombers from potential WWII airstrikes
- 1 house, 45 offers: Homebuyers in Western Washington hard-pressed as supply remains scarce
- Seattle artists worry potential sale of historic INS building could spell the end for their studios
- Frontier cancels flight, citing maskless passengers
“This highly challenging environment requires us to become even more disciplined with how we manage costs across our entire organization,” Starbucks said in a statement. “This includes looking closely at the benefits programs we make available to our partners.”
The company has been attempting to cut costs and boost profits for months by closing nearly 600 underperforming stores in the U.S. and about 60 locations in Australia.
At an analyst conference earlier this month, Starbucks said it expects to save about $200 million to $210 million in costs in fiscal 2009 from initiatives already under way. The company added it had identified another estimated $200 million in savings that could come from cutting labor costs or streamlining distribution.
With the economy sinking further into a recession, a number of big companies have said they will suspend their 401(k) matches for employees. FedEx said last week it will eliminate its match beginning on Feb. 1 for at least a year.
Motorola and Eastman Kodak have also both said they will temporarily suspend matches to employee-retirement plans.