New Starbucks CEO starts early, says he’ll work cafe shifts

Fariha Alam

Starbucks Corp. CEO Laxman Narasimhan made several announcements regarding his role in the company, including his work shifts in its cafes, after he assumed the role ahead of schedule on March 15.

The coffee shop chain appointed Narasimhan as its new CEO in September 2022 while he served as CEO of Reckitt Benckiser Group PLC, the United Kingdom-based multinational consumer goods company that produces Lysol disinfecting spray. He was originally scheduled to assume his role at Starbucks on April 1, but he began two weeks earlier to ensure a smooth transition.

Narasimhan’s decision to work once-a-month cafe shifts is part of his plan to better understand the company’s customers and the challenges faced by its employees.

“To keep us close to the culture and our customers, as well as to our challenges and opportunities, I intend to continue working in stores for a half day each month,” Narasimhan wrote in a company letter March 23. “I expect each member of the leadership team also to ensure our support centers stay connected and engaged in the realities of our stores for discussion and improvement.”

Starbucks has faced employee-related challenges, including efforts to unionize cafes.

Employees at three cafes in Buffalo, New York, voted in December 2021 to unionize, making them the first Starbucks workers in the United States to do so. Since then, other Starbucks workers across the country have launched unionization efforts, including the Starbucks Reserve Roastery in New York City’s Chelsea neighborhood.

To prepare for his new role, Narasimhan underwent a six-month training program, which included working in Starbucks’ cafe locations, roasting plants and corporate offices. He also met with employees, customers and stakeholders to learn more about the company’s culture and values and understand how it operates.

Starbucks had more than 9,000 company-operated stores and about 6,600 licensed storefronts in the United States in 2022, according to Statista.

For the 2022 fiscal year, the company reported a net revenue of $32.2 billion, crediting the results to an increased demand for its coffee during the fourth quarter.

Former Starbucks CEO Kevin Johnson served in the position for three years before retiring from the role on April 4, 2022. Howard Schultz, who preceded Johnson as CEO, returned to the executive position while the company searched for a permanent CEO.

Since the former CEO returned to his role, Starbucks’ stock has increased nearly 8%, raising its market value to $113 billion against a 15% drop in the S&P 500. Schultz worked closely with Narasimhan to ensure the transition in leadership is smooth. He will remain on the company’s board of directors.

“Today, I am entrusting you all with Starbucks — something that holds a place in my heart second only to that of my beloved family,” Schultz wrote to corporate leadership in a letter, as reported by CNBC.

Narasimhan told The Wall Street Journal that workers have the right to unionize, but he also said he will work to have them directly negotiate their needs with the company.

The new CEO reportedly worked with Starbucks workers in Chicago during one busy morning. Employees said they enjoyed the friends they made on the job but noted they have struggles with balancing their duties during shifts.

“People drink coffee in the morning,” Narasimhan told The Wall Street Journal. “I can’t help that.”