Howard Schulz did not hold back in a recent interview when asked about the future for younger generations and recent uprisings at his famed coffee chain Starbucks (SBUX).
Schultz, who bought Starbucks from its original founders in the early 1980s and helped turn it into the multinational giant that it is today, is concerned about the over 400,000 baristas and employees who make the company run.
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He's less concerned about their mental health or the strain that being a barista so infamously places on a person, however. He's more worried about the effect many workers' efforts to unionize might have on the company.
Howard Schultz Was 'Shocked' By Recent Starbucks Uprisings
Speaking to CNN's Poppy Harlow in a recent Feb. interview, Schultz admitted he "should have probably stayed engaged," after retiring in 2018 and handing the reins to Kevin Johnson. He added that "mistake" might have been what spurred unionization efforts in the first place.
Between 2018, when Schultz retired, and 2022, when he returned as CEO, he admitted that "some decisions were made that I would not have made," which caused people to "lose trust in the leadership of the company."
Some of that mistrust might have led the initial efforts to unionize, which began in earnest in 2021, when many baristas felt overworked and under-appreciated following the covid pandemic. Despite Starbucks' efforts to appease workers and prevent unionization, several locations were successful in their endeavors. Since 2021, over 260 Starbucks locations in 40 states have voted to unionize -- which is an astonishing 80% union win rate. During the push, Schultz was CEO from April 2022-onward.
But the CEO believes unions are unnecessary and bring a lot of baggage to the chain, saying he doesn't "think a union has a place in Starbucks."
"It’s my belief that the efforts of unionization in America are in many ways a manifestation of a much bigger problem," Schultz said. “There is a macro issue here that is much, much bigger than Starbucks. I’ve talked to thousands of Starbucks partners, and I was shocked, stunned to hear the loneliness, the anxiety, the fracturing trust in government, the fracturing trust in companies, fracturing trust in family, a lack of hope in terms of opportunity."
What's Next for Starbucks?
Schultz is expected to leave his post as CEO in April 2023, but that doesn't mean the underlying labor issues have been resolved. Starbucks continues to grapple with demand and order complexity, barista unhappiness and more unionization efforts.
And the issue isn't going away. Other large corporations, including Tesla (TSLA) and Amazon (AMZN) have grappled with their own workers' attempts to unionize.
"I came back this past year because the company really did lose its way, and it lost its way culturally," Schultz said. "The unions showed up because Starbucks was not leading in a way that was consistent with its history in terms of being a values-based company and I came back to basically restore those values."
Tasked with restoring those values will be Laxman Narasimhan, the former Reckitt CEO and PepsiCo (PEP) chief commercial officer. Narasimhan comes with an impressive track record; he was educated at Wharton School of Business and speaks six different languages. Hopefully one of them is compassion.
