NEW YORK (Reuters) – Starbucks Corp’s longtime former chief executive Howard Schultz announced on Monday the suspension of the company’s stock repurchasing program, as he returns this week to lead the global coffee chain for the third time.
The suspension, effective immediately, will allow Starbucks to invest more in the company’s people and its stores, Schultz said in a letter to Starbucks stakeholders.
The move comes as the company faces realities including pinched supply chains, effects from the coronavirus pandemic and heightened tensions and political unrest, Schultz added.
Starbucks is facing a growing unionization of its U.S. workforce. Employees at 10 U.S. Starbucks locations have voted in recent months to join Workers United, an affiliate of the Service Employees International Union.
Baristas at more than 170 U.S. locations have petitioned a federal labor board for union elections since August, when the union drive went public.
Starbucks announced last month that Schultz would take over as interim CEO, following the retirement of Kevin Johnson. Shares of the coffee chain shot up about 5% on March 16, the day of the announcement.
Schultz is practically synonymous with the company he took over in 1987. During his previous four decades as chief executive and chairman, the company grew from 11 stores to more than 28,000 in 77 markets worldwide, according to a news release.
Along with suspending the share repurchasing program, Schultz will travel in the weeks ahead to connect with employees in stores and manufacturing plants, as well as engage in design sessions with employees, he said in the letter.
“I am returning to the company to work with all of you to design that next Starbucks — an evolution of our company deep with purpose, where we each have agency and where we work together to create a positive impact in the world,” he added.
(Reporting by Hilary Russ, writing by Stephanie Kelly; Editing by Sam Holmes)
