Starbucks Hopes To Improve Relationship With Workers Under New CEO

Starbucks, under new chief executive officer Brian Niccol, is working to improve work conditions for employees, an issue that's become so prevalent that it led to unionization.

Some of the ongoing challenges facing workers includes short-staffing and bottlenecks in the workflow, which led to customer dissatisfaction and declining sales, reported Yahoo Finance.

Same-store sales in the U.S. dropped 6% in the latest quarter, reported the news outlet, with adjusted earnings per share sinking to 24%.

Niccol is addressing the operations issue with plans to increase staff at 3,000 stores and by utilizing the Siren Craft System, a relic of ousted CEO Laxman Narasimhan, to streamline operations and reduce bottlenecks.

Starbucks workers first started to unionize in 2021 and they continue to face allegations of low wages, poor scheduling, and inadequate equipment. Currently, there are 515 Starbucks stores represented by Workers United out of nearly 17,000 locations in the U.S.

Niccol wants to recover the brand by making Starbucks more employee-friendly like his previous employer, Chipotle, which has seen its shares increase by 31%, according to Yahoo Finance.

This year, Starbucks shares have underperformed, with its stock currently valued at 3 times its total sales in 2023. This is lower than McDonald's, which is valued at 8 times its sales, and Dutch Bros, which is valued at 3.7 times its sales, said the news outlet.

Niccol wants to bring back career growth opportunities for employees. "It's important to get to this 90 percent promote within," Niccol said to Yahoo Finance.

These improvements are all part of Niccol's U.S. market revival ahead of a global overhaul plan to expand Starbucks stores to 55,000 locations by 2030.