In 2008, Starbucks investors were pressuring CEO Howard Schultz to cut costs at the coffee chain.
In a 2010 interview, Schultz said an investor had a novel idea for saving money: “What if Starbucks eliminated health care benefits for part-time employees?” Schultz turned down the suggestion and instead suggested the investor consider selling his stock, he told Fortune magazine.
But to one Starbucks employee at a North Carolina cafe for 19 years, Schultz’s decision about health benefits represents the Starbucks of the past.
“It used to be a great place to work,” the employee said. “No one wanted to leave Starbucks unless they were in college to further their career or retire with the company.” The employee asked not to be identified in this story for fear of retaliation from Starbucks, but Business Insider confirmed his identity and where he works at the company.
Starbucks is at a crossroads: After years of trying to thwart attempts by workers at hundreds of stores to form a union and negotiate contracts, Starbucks this year signaled its intention to negotiate with those workers.
The company is also in the midst of a CEO transition: Starbucks announced last month that Chipotle CEO Brian Niccol would succeed Lakshman Narasimhan as CEO, effective Sept. 9. The move comes as Starbucks faces sluggish sales in the U.S., long customer wait times and challenges with its business in China.
In addition to the continuing health insurance option for part-time workers, the North Carolina workers also pointed to the company’s “Bean Stock” stock-grant program and decision to call store workers “partners,” two programs Starbucks launched in 1991, shortly after Schultz became CEO.
The employee, who started working at Starbucks in the mid-2000s, said that when he joined the company, the company had a reputation for treating employees well, but changes in recent years, including cuts to store staffing and the rise of mobile ordering, have altered that perception, he said.
The Starbucks store where this employee works had a maximum of five employees a few years ago, but now has two to three employees working on a shift basis. As a result, the burden on store staff has increased, especially with the constant stream of orders coming in via the Starbucks app, and they have less time to serve customers who order in-store.
“What started out as a trendy, quirky coffee shop operation has since morphed into a soulless fast-food empire,” the employee said.
“I’ve said things have really gotten worse since Howard left,” he added, referring to the period after Schultz stepped down as CEO in 2017.
A Starbucks spokesman said the company seeks employee feedback through surveys and meetings with employees and management, and store associates “have multiple opportunities throughout the year to voice their opinions, share their experiences and suggest improvements,” the spokesman said.
Wall Street analysts have praised Niccol as the turnaround expert Starbucks needs, citing Chipotle’s stock price having risen several-fold during his tenure.
But a Starbucks employee at a North Carolina store isn’t as optimistic. He told BI he’s skeptical that Nicol will be able to address the issues he sees in stores, namely chronic understaffing and a surge in mobile orders that tend to overwhelm on-duty employees.
A Starbucks spokesman declined to comment on what Nicol’s initial plans are for employee compensation or working conditions. The spokesman said baristas’ hourly wages will range from “$15.25 to $26.”
The North Carolina worker pointed to the presence of a Chipotle near the Starbucks where he works as another reason to feel hopeless.
“Every time I go, they always seem angry,” he said of the Chipotle employees he sees there, “and sometimes it seems like they don’t have enough employees.”
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