Coffee giant Starbucks (SBUX) seems to really want workers to move out of Seattle. Not only is it offering extra incentive to get its workers to move to Tennessee—though some of these incentives come with drawbacks, like the stock grants, at last report—but also it seems to be making it harder to stay in Seattle. Starbucks just cut several tech jobs, a move that gave Starbucks a modest boost in Wednesday afternoon’s trading.
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Internal communications revealed that Starbucks cut a number of technology jobs, though just how many were cut was unclear. Also unclear was whether or not these jobs were all Seattle-based jobs, or what proportion of them were. But the cuts had been the talk of office rumor for several days before landing, reports noted.
Starbucks noted, “We are making structural changes to move faster, sharpen focus, and ensure we are set up to deliver on our most important priorities.” This report actually came out independently from a separate announcement revealing that some of the tech jobs in Seattle would be relocated to Nashville, a point that Starbucks has been emphasizing for some time now. The cuts will likely not end here, though, as more are expected in May.
Nine-Figure Boost
So while Starbucks is cutting jobs elsewhere, it is piling investment into its Nashville operations. Reports note that Starbucks is putting $100 million into Nashville, along with around 2,000 jobs. Earlier reports suggested that the Nashville initiative would cost less than that, and cover everything from supply chain to broader support. Yes, technology jobs would be included, like the kind recently lost in Seattle.
The new reports say that Starbucks will move into The Gulch starting this May, before moving to the Peabody Union complex, where more permanent office space will be established. That move will hit in 2027, reports note. There were some corporate incentives involved in the plan, including elements from the Tennessee Valley Authority, the Nashville Area Chamber of Commerce, and the Tennessee Department of Economic and Community Development.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 14 Buys, 13 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 18.1% rally in its share price over the past year, the average SBUX price target of $102.24 per share implies 3.8% upside potential.
