The New York Budgets

Tag: Starbucks Corporation

  • Starbucks mandates four-day office return for employees, while CEO Brian Niccol keeps his remote work privilege

    Starbucks mandates four-day office return for employees, while CEO Brian Niccol keeps his remote work privilege

    Starbucks will increase its return to work mandate for corporate employees to four days a week — even as CEO Brian Niccol is allowed to work remotely from his California home after getting hired last year. 

    The new policy, outlined in a companywide message from Niccol, will require corporate employees and managers to be on-site Monday through Thursday at the company’s Seattle and Toronto offices as well as at its North American regional hubs, beginning in January.  

    “To give partners time to adjust, this expectation will begin with the new fiscal year,” Niccol wrote in the memo.  

    “We’ll share more details before October, including our plans to ensure everyone has an assigned dedicated desk.” 

    The shift from three to four required days in the office marks the latest escalation in Starbucks’ broader “Back to Starbucks” turnaround strategy helmed by Niccol, whose main residence is in Newport Beach, Calif.

    The company says Niccol’s “default” is to reside in Seattle when he isn’t traveling to the company’s coffeehouses worldwide.

    When asked if Niccol works from his California residence, the company declined to comment.

    The java giant also is expanding its relocation mandate, requiring all managers at its corporate locations to move to Seattle, Toronto or cities that host regional offices within the next 12 months — a policy that builds on a previous directive for vice presidents and above. 

    When Niccol was named CEO last year, Starbucks allowed him to remain in Newport Beach.

    The company pays for a dedicated remote office near his home, provides a personal assistant and allows him to use a corporate jet to commute to Seattle, according to filings with the Securities and Exchange Commission. 

    Niccol was awarded roughly $96 million in total compensation after his first four months as Starbucks CEO, with about 94% of that coming from stock awards and an additional $5 million sign-on bonus, the filing showed.

    His pay package also included more than $400,000 in perks such as housing, jet travel and security expenses. His annualized pay is estimated at $113 million, placing him among the highest-paid CEOs in the country.

    Before tapping the former Chipotle boss, Starbucks was grappling with significant turmoil, including four CEOs in five years, declining sales, profit drops and operational inefficiencies like overcomplicated menus and slow service. 

    The company also faced labor unrest, legal challenges, and brand identity confusion, while external pressures such as inflation and rising competition further strained performance and investor confidence.

    Starbucks has stated that while Niccol is permitted to work remotely, he is expected to spend a significant amount of time at the Seattle corporate headquarters and at company locations around the world.  

    A company spokesperson previously said that “Brian’s primary office and a majority of his time will be spent in our Seattle Support Centre or out visiting partners and customers in our stores, roasteries, roasting facilities and offices around the world.” 

    “His schedule will exceed the hybrid work guidelines and workplace expectations we have for all partners,” the spokesperson said.

    In his message, Niccol emphasized that human connection remains a foundational value for Starbucks. 

    “We are reestablishing our in-office culture because we do our best work when we’re together,” he wrote.  

    “We share ideas more effectively, creatively solve hard problems, and move much faster.” 

    He acknowledged that not all employees would welcome the policy.

    “We’ve listened and thought carefully,” he wrote. “But as a company built on human connection, and given the scale of the turnaround ahead, we believe this is the right path for Starbucks.” 

    Starbucks said it will offer a one-time voluntary exit package for employees who refuse to comply with the new policy.  

    “If you decide you want to leave Starbucks for any reason, we respect that,” Niccol wrote. 

    “To support those who decide to ‘opt out,’ we’re offering a one-time voluntary exit program with a cash payment for partners who make this choice.” 

    The internal changes come amid wider scrutiny over executive remote work arrangements. 

    A recent study by researchers at Boston College and Arizona State University, as cited in the Star Tribune, found that companies led by CEOs who live far from their corporate headquarters often see lower employee satisfaction and weaker financial performance.

    The report, which examined nearly 1,000 firms between 2010 and 2019, concluded that so-called “fly-in CEOs” tend to be less informed about day-to-day operations and more focused on short-term gains. 

    The study noted that about 18% of companies surveyed had CEOs residing far from headquarters.  

    Geographic trends showed that remote CEOs were more common in colder, landlocked central US states. Despite its climate, Minnesota, for example, had one of the lowest rates of remote CEOs among its Fortune 500 firms. 

    Starbucks, for its part, maintains that its office return policy is necessary to drive collaboration and accelerate business recovery.

    “As we work to turn the business around, all these things matter more than ever,” Niccol said in his memo.

    “We’re driving significant change across the company while staying true to our core values.” 

  • Baristas at Starbucks are walking off the job to protest changes to the dress code

    Baristas at Starbucks are walking off the job to protest changes to the dress code

    Starbucks workers staged walkouts at dozens of coffee shops in the United States this week to protest a policy change in their dress code that their union says should have been made through collective bargaining.

    Since May 11, more than 2,000 baristas at more than 100 stores, including in Wisconsin, Florida and Pennsylvania, have walked out “to protest the company’s failure to prioritize real support for baristas,” the union said on Friday.

    The protests were in response to an announcement by Starbucks in April that, starting on May 12, baristas would be required to wear solid black crew-neck, collared or button shirts with khaki, black or blue denim “bottoms,” referring to pants, shorts or skirts under their aprons.

    The company said the “more simplified color options” would allow the traditional green aprons worn by baristas to “shine and create a sense of familiarity for our customers, no matter which store they visit across North America.”

    But Workers United, which represents baristas at 570 of the more than 10,000 Starbucks stores in the United States, said the policy change without bargaining was “regressive.”

    “Instead of fixing problems customers actually care about, like long wait times & high prices, Starbucks would rather focus on the colors workers wear,” the union said on social media this week.

    The workers who participate in walkouts generally leave for the remainder of their shift but come back to work for their next scheduled shift. During the walkouts, some coffee shops have only enough workers to keep a drive-through window functioning while shutting down mobile orders and counter service.

    Jasmine Leli, a union delegate and a barista at a Starbucks in Buffalo, said she was among half a dozen workers who walked out on Tuesday morning. A district manager showed up with another worker and kept drive-through service running for a few hours before closing, she said.

    The walkouts are not expected to continue into next week, she said. The company, she said, should “focus on store issues,” including staffing shortages, guaranteed hours and wages, “instead of the dress code.”

    The union said many workers had already purchased approved clothing from Starbucks that they were no longer allowed to wear on duty. Starbucks said it would provide two shirts to employees if needed.

    Starbucks said in a statement that the disruption had been minimal over the past four days.

    “There has been no significant impact on our store operations on a national scale,” it said. “The overwhelming majority of our 10,000 U.S. company-operated stores remain open and are serving customers as normal.”

    “It would be more productive if the union would put the same effort into coming back to the table to finalize a reasonable contract,” it said.

    Starbucks and the union had temporarily agreed to collective bargaining over dress code changes as part of ongoing negotiations for a new contract. In December, a bargaining session with the company failed to produce better wage gains.

    The union filed a complaint with the National Labor Relations Board, accusing Starbucks of engaging in bad faith bargaining.

    After Starbucks announced in April that it was changing the dress code, the union updated that complaint, saying the company had undermined it by “improperly moving the goal posts for collective bargaining.”

    Starbucks said it would continue to bargain in “good faith.”

    “It would be more productive if the union would put the same effort” it put into the walkouts “into coming back to the table to finalize a reasonable contract,” it said.