Veteran Starbucks boss Howard Schultz is leaving the company’s board after 40 years at the coffee shop, with sources saying he realized he had become a “distraction” to the company. chain.
Schultz, 70, bought the company from co-founders Jerry Baldwin, Zev Siegl and Gordon Bowker in the early 1980s, a decade after launching in Seattle.
But on Wednesday, Starbucks unexpectedly announced that Schultz was stepping down from the board, ending his four-decade reign.
Schultz’s departure is partly due to concerns that his staunchly anti-union stance will become a “distraction,” and that the controversy will not help the brand.
“The business has changed a lot since Howard’s heyday,” one source said. The New York Post.
“It no longer makes sense for him to be a part of it.”
Howard Schultz is pictured in March testifying to his company’s resistance to unionization
Schultz was seen in 1983 in Italy, during a research trip. On his return, he tried to convince the three founders of Starbucks to offer traditional espresso drinks in addition to coffee beans.
Schultz pushed the company to become the world’s largest coffee chain, serving in three positions as chairman and CEO. He retired in 2000, then returned in 2008; resigned in 2017 and returned as interim CEO from 2022 to March 2023.
During his last term, Schultz faced pressure from stores seeking to unionize. At least 293 of the 9,000 company-owned U.S. Starbucks stores have voted to unionize since the end of 2021, according to the National Labor Relations Board.
Starbucks Workers United, the labor group seeking to unionize stores, has yet to reach a contractual agreement with the company at any Starbucks stores.
The new group celebrated Schultz’s departure by tweeting Tuesday: “Howard Schultz led one of the worst anti-union campaigns in modern U.S. history, culminating in his being forced to testify before the Senate on illegal actions of Starbucks.
“We hope this is an opportunity for Starbucks to change course and leave its anti-union policies behind.”
Starbucks’ anti-union stance appears likely to continue under the company’s new CEO, Laxman Narasimhan, who was hand-picked by Schultz and took over as CEO in March – shortly before Schulz testified in the Senate.
“I continue to believe that a direct relationship with our partners is the best way forward,” Narasimhan said.
Schultz is seen in 2002 opening Starbucks in Japan
Schultz – who will now become “chairman emeritus” – has spoken out openly against plans to unionize Starbucks workers, saying the company is “under organizing assault.”
Judges and prosecutors accused the company of violating labor laws, and in March Schultz appeared before Congress to defend the company’s position.
During an often difficult two-hour appearance before the Senate Health, Education, Labor and Pensions Committee, Schultz said a union was not necessary because the coffee company already offers good wages and benefits, and only about 1 percent of Starbucks’ 250,000 employees in the United States. chose to join a union.
“We have done everything we can to respect the statutory right of our partners’ ability to join a union,” Schultz said.
“But conversely, we have always expressed our preference, without breaking any laws, to communicate to our employees what we believe to be our vision for the company.”
Bernie Sanders, a Vermont independent who has been a strong supporter of Starbucks union organizers, accused the company of stalling.
He said multiple federal courts and NLRB administrative judges have found Starbucks guilty of hundreds of labor law violations, including firing union organizers and illegally closing unionized stores.
Schultz is seen in March 2019, as he considers an independent bid for the White House. In June 2019, he announced that he would not run for president.
“The fundamental question we face today is whether we have a justice system that applies to everyone, or whether billionaires and big corporations can break the law with impunity,” Sanders said.
But Schultz defended the company, pointing out that Starbucks’ average starting wage is $17.50, while the minimum wage in Vermont is $13.18.
“I think unions have played an important role in American business for many years,” Schultz told the committee.
“In the 1950s and 1960s, unions generally worked on behalf of workers in a company where people were not treated fairly.
“We don’t think we’re that kind of company. We are not doing anything nefarious.
We put our employees first.
Sen. Tina Smith, a Minnesota Democrat, questioned Schultz’s respect for employees, pointing out that the company had refused to add new benefits — like credit card tips or pay raises — in unionized stores.
“You are a billionaire and these are your employees. The imbalance is extreme,” Smith said.
Schultz responded angrily that repeatedly calling him a “billionaire” was unfair.
“I grew up in federally subsidized housing. My parents never owned a house. Yes, I have billions of dollars.
I won it. Nobody gave it to me,” he said.
On Wednesday, Schultz said he supported the company’s new bosses.
“I look forward to supporting this next generation of leaders to lead Starbucks into the future as a customer, supporter and advocate in my role as Chairman Emeritus,” he said.