In an abrupt move, Starbucks said Wednesday that Kevin Johnson, its CEO since 2017, is retiring after 13 years with the company.
Howard Schultz, who joined Starbucks in the early 1980s and grew it into a global giant, will serve as interim CEO when Mr. Johnson, 61, leaves his job on April 4, the company said. Mr. Schultz, 68, had served as CEO twice before, most recently from 2008 to 2017, when Mr. Johnson took over and Mr. Schultz became executive chairman. Starbucks said it had hired a search company and expects to elect a new leader by the fall. Mr. Schultz, who left the company in 2018, will also rejoin the company’s board of directors.
The announcement comes ahead of Starbucks’ annual shareholders’ meeting on Wednesday, at which Mr. Johnson will speak. Mr Johnson said he first discussed his plans with the company’s board of directors last year.
“A year ago, I signaled to the board that as the global pandemic comes to an end, I would consider retiring from Starbucks,” Johnson said in a company statement. Shares of Starbucks rose more than 6 percent on Wednesday.
Under Mr Johnson, Starbucks was one of the major winners of the pandemic. As Covid-related restrictions closed restaurants across the country to guests, Starbucks has successfully used its drive-throughs, app and loyalty program to quickly deliver lattes and snacks to customers. By spring 2021, Starbucks said sales at its restaurants had “completely recovered” from pandemic closures.
Last fiscal year, which ended October 3, 2021, Starbucks saw sales rise more than 23 percent, or $6 billion, to $29 billion from a year earlier, when the pandemic shut down parts of the country for weeks. Operating income more than doubled to $4.8 billion.
But while Starbucks’ financials have been robust, the company has struggled in recent months to manage a wave of union unions. Before December last year, none of the company’s 9,000 stores had joined a union. Since workers at two stores near Buffalo voted to unionize in December, at least six locations have done so and workers at more than 100 stores have signed up for union elections.
Starbucks was hit on Tuesday by a complaint from the National Labor Relations Board, which accused the chain of illegally punishing two Arizona employees involved in the union action at a Phoenix location, the latest in the company’s labor disputes.
SBWorkersUnited, which updates and gathers workers on social media about the union action, tweeted Wednesday morning for “Howard Schultz, who has been a leader of Starbucks’ anti-union campaign to put union disbandments behind and the future of Starbucks to embrace.” In November, just before the union vote began at three Starbucks locations in Buffalo, Mr. Schultz showed up to speak with workers.
“We are not a perfect company,” Mr. Schultz told employees during the meeting, according to a transcript provided by the company. “Mistakes are made. We learn from them and we try to solve them.” He argued that the company’s history of doing good for its employees, including offering health care benefits and equity, shows that it had their best interests in mind.
In Wednesday’s announcement, Starbucks said that Mr. Johnson will remain on the board and as an advisor until September. The company, which said it has been working on succession planning since last year, said it expects to have a new CEO by the fall.
This isn’t the first time Mr. Schultz, who joined a small Seattle coffee shop called Starbucks in 1982 before buying it later, has returned to run the business.
After stepping down as chief executive in 2000, but remaining as chairman, Mr. Schultz returned in 2008, abruptly replacing Jim Donald, then the chief executive, as the company struggled with a downturn in the economy, an influx of coffee competition and missteps.
“When I came back in January 2008, it was actually worse than I imagined,” Mr. Schultz told Harvard Business Review in 2010.
In 2017, Mr. Johnson, then president of Starbucks and former senior executive at Microsoft, became chief executive. A year later, Mr. Schultz stepped down as executive chairman and board member.
March 16, 2022
An earlier version of this article incorrectly stated who will speak at Starbucks’ annual shareholders’ meeting on Wednesday. They are Mr. Johnson and Mellody Hobson, not Mr. Johnson and Mr. Schultz.
