Howard Schultz, back at Starbucks, seeks fresh start with baristas

Last November, Howard Schultz visited Buffalo, NY with a message to workers considering forming a union: Starbucks SBUX 2.21%

would do the best job looking after the interests of the employees.

In an hour-long speech delivered without notes, Mr. Schultz, the former Starbucks Corp. executive, called on employees to work with management. “Our primary goal and purpose is to build the kind of business that strikes a delicate balance between profit and doing the right thing,” he said.

Many Buffalo baristas disagreed with Mr. Schultz; instead, they voted to unionize. They said they believed the organization was needed to achieve better salaries, adequate staffing, and a stronger voice in company affairs.

Now Mr. Schultz, 68, will have to please shareholders while trying to win over Starbucks employees — and those the chain still aims to hire. In April, Schultz will return for his third stint at the helm of Starbucks, taking on a role as interim chief executive after the chain said this week that current CEO Kevin Johnson would retire after five years at the top. the company. Part of Mr. Schultz’s goal, he told employees this week, is to set a new tone with the roughly 230,000 workers who occupy his American cafes.

“We need to take a hard look at how we are doing as a company and as a community of partners,” Schultz wrote in a message to Starbucks workers on Wednesday. “These are the questions that concern me as we renew a journey to see beyond what Starbucks was and what it is today to what it will become.”

Restaurant owners in the United States are struggling to recruit and retain enough staff to fully staff venues, and quit rates among hospitality workers hit record highs last year, according to federal data. Starbucks, the world’s largest coffee chain by sales, had to cut hours and limit services earlier this year in some understaffed locations due to continued worker shortages and rising cases of Covid-19.

The short-staffed stores have left some baristas feeling overwhelmed, workers said, as customers continue to order highly personalized and labor-intensive drinks.

Starbucks needs more workers to meet its growth goals. The company said this week that it aims to open more than 20,000 cafes globally by the end of the decade. It should also improve investor sentiment towards the stock. Starbucks stock, which has tracked shares of other restaurant companies in recent months, has risen about 8% since announcing Mr. Schultz’s return on Wednesday.

After buying the local Starbucks coffee outpost in 1987, Mr. Schultz shaped Starbucks’ image and customer experience, developing its cafes as a place to linger over espressos and lattes. He also helped design the company’s offerings for its baristas and other workers, offering benefits that Schultz says go beyond most retailers, covering the cost of employee health care, holidays and benefits for those who work at least 20 hours a week in the chain. A year before the company’s IPO in 1992, Starbucks began giving stock to baristas, a practice the company continued.

“I was confident that under my leadership, employees would realize that I would listen to their concerns,” Schultz wrote in “For Your Heart into It,” his book about Starbucks’ transformation into a global coffee company. . “If they had faith in me and my motives, they wouldn’t need a union.”

During his early stints at the helm of Starbucks, Mr. Schultz often held town hall-style forums to talk with workers and sometimes contacted employees directly. In 2016, after a California barista named Jaime Prater wrote an online petition about working conditions at Starbucks that attracted nearly 25,000 signatures, Mr. Schultz called the employee. The CEO then raised salaries and issued company stock to many American cafe employees.

Mr. Prater remembers being thrilled when Mr. Schultz called him, feeling that his voice mattered. He said he appreciated the added perks, but said the general work environment at his cafe hadn’t improved.

“It was the most demanding and difficult job I’ve ever done,” said Mr. Prater, who left Starbucks in 2018 and now works as chief marketing officer.

The company is now facing the most concerted organizing campaign in its history. Pro-union workers said unionization would help provide better pay and working conditions, as well as representation among Starbucks decision makers. Starbucks said it respects the unionization process, but wants to maintain its direct relationship with workers and advised them against unionizing.

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Since the union campaign began in Buffalo-area coffee shops last year, about 140 Starbucks American coffee shops have demanded to hold votes on whether their workers should be represented by Starbucks Workers United, formed in the Buffalo coffeehouse votes approach the end of 2021. Next week, the National Labor Relations Board is due to count the ballots in the first labor campaign at Mr. Schultz’s primary residence in Seattle. Starbucks asked the federal labor agency to review the structure of this vote, as it has done in other elections. So far, the company’s appeals have been unsuccessful.

Mr. Schultz and the company’s next permanent CEO, whom Mr. Schultz will help select, must respond to union pressures and workers’ concerns in a credible way, said Starbucks Board Chair Mellody Hobson. . The company also needs to hold itself accountable when it gets it wrong, Ms Hobson said in an interview.

“I’m very confident that our partners were talking to us, and I don’t think we were hearing that,” Ms. Hobson said, referring to company baristas.

Taylor Shaw, a shift manager at a Buffalo Starbucks who recently voted to unionize, said she hopes Schultz’s return will lead to a greater focus on workers.

“It was, ‘What are your drivers [through] times? What are your sales?’ Obviously that’s important when you’re running a business, but it seems Howard was more concerned with the personal connection that Starbucks talks about,” Ms Shaw said.

Mr. Schultz invites comments from the workers. He signed his Wednesday email to employees asking them to email him at his Starbucks address.

Brewing changes at Starbucks

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Write to Heather Haddon at [email protected]

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