(Nov 21): Starbucks Corp reduced its US retail workforce by 8% in its most recent fiscal year, even as the coffee chain added hundreds of new locations.
The company’s overall headcount in its home market fell to 211,000 as of Sept 29, down from 228,000 a year earlier, according to a regulatory filing Wednesday. Of that total, 201,000 work in the company’s cafes, down 8% from 219,000 in 2023.
It’s the second straight year that the tally of US workers has fallen. At the same time, Starbucks added a net 513 company-operated stores in the US, bringing the total to 10,158.
Starbucks’ operations are under scrutiny following a sales slump that led to the abrupt ouster of chief executive officer Laxman Narasimhan. He was replaced with industry veteran Brian Niccol, who is leading turnaround efforts that include simplifying the company’s menu and making its cafes more welcoming, in part by adding more comfortable seats.
Headcount has been an area of concern for employees, and staffing levels ranked as the issue with the lowest approval rating in an internal company poll that was conducted in April. “We are constantly only given a skeleton staff,” one worker said in comments collected as part of the survey results. The workers said low staffing levels lead to drink and food order backlogs.
Starbucks says it has increased the number of hours employees get each week on average, which allows staff to earn more and maintain benefits. It has also been working to more accurately tailor staffing levels to each store’s needs. The company has added more labor hours to more than 3,500 stores in the past year. Niccol has also pledged to give baristas the “tools and time” they need to do their jobs.
The filing also showed a rise in the share of unionized workers, with the percentage rising to 5% at the end of the company’s fiscal year, up from 3.6% a year earlier. Earlier this year, Starbucks and its union started talks about how to achieve collective-bargaining agreements and provide a fair process for union organising, seeking to end an impasse. Niccol has said he’s committed to bargaining in good faith.
Activist investor pressure
The company also acknowledged the impact of pressure from activist investors.
“Certain activist shareholder actions have caused, and could continue to cause, us to incur expense, hinder execution of our business strategy, and adversely impact our stock price,” Starbucks said in the filing.
Starbucks has confirmed that Elliott Investment Management has a stake in the business. Elliott has called on the company to review its business in China. The Strategic Organizing Center, which advises union pension funds, has also sought changes at the company.
Uploaded by Magessan Varatharaja