Starbucks CEO to retire, predecessor to return to role

Meshal Muhammad

Starbucks Inc. CEO Kevin Johnson announced that he is stepping down at the beginning of April after five years. Until a permanent CEO is found, his predecessor Howard Schultz will head the coffeehouse chain.

The news proved advantageous for Starbucks stock, which climbed 4.8% by market close on Wednesday after being down almost 26% for the past year.

The COVID-19 pandemic, inflation and strong efforts from many U.S. stores to unionize have put a lot of pressure on Johnson and the Starbucks executive board in recent months to re-evaluate its plan for the future.

The company has shown a less than favorable view of its employees, who are referred to as “partners,” showing desire to unionize. Stakeholders expressed their worries in a recent letter to the company.

Over six stores in 25 states have voted to unionize, while it is expected that more than 100 stores will have their votes in the near term. Unionization efforts were sparked by posts on social media apps TikTok and Instagram that alluded to the bad working conditions and other worker-related issues.

Schultz flew to Buffalo, New York to speak with partners to tamper down unionization efforts. Schultz expressed sorrow to them for not helping them manage operational issues sooner and that he was not “anti-union” but “pro-Starbucks.” Unfortunately, this did little to dampen nationwide unionization efforts.

Schultz is a driving factor in the company’s distrust in unions, and it is still unclear whether he and Starbucks will continue leading with this narrative. Instead, Schultz will focus on setting an innovative framework and training the new CEO.

“Although I did not plan to return to Starbucks, I know the company must transform once again to meet a new and exciting future,” Schultz said.

Schultz helped change the way publicly listed companies view their responsibilities to employees by offering health care benefits, stock ownership plans and college tuition for full-time and part-time workers. A lot of his views were impacted after seeing his father, a truck driver, lose his job due to a work-related injury.

Schultz will be volunteering his time, receiving a payment of $1 for tax purposes.

“A year ago I signaled to the board that as the global pandemic neared an end,” Johnson said in a press release, “I would be considering retirement from Starbucks.”

During his 13 years at the company, Johnson has served as a board member, COO and CEO, the latter role since 2017. Johnson contributed to the corporation in many ways, such as establishing and implementing the “People Positive, Plant Positive and Profit Positive” framework, which aims to improve relationships with partners, farmers and customers. Johnson also expanded the company’s global coffee alliance with Nestlé S.A.

Starbucks expects to announce a permanent CEO by this fall.