Starbucks stock dipped 4% after new ceo Schultz suspends stock buyback plan.
"Starting immediately, we are suspending our share repurchasing program," Schultz said in an open letter published on Monday.
"This decision will allow us to invest more into our people and our stores — the only way to create long-term value for all stakeholders."
Schultz’s return marks his third spell as Starbucks’s CEO as the world’s largest coffeehouse chain continues the search for its permanent Chief Executive. The company said it will find a new CEO by the fall.
However, the past several months have been challenging for Starbucks after multiple stores unionized against the company for the first time ever since its founding in 1971.
The move comes just a few weeks after Starbucks brought back its share buyback program, saying it plans to return $20 billion to its shareholders over the following three fiscal years.
Some think the decision to suspend the program was made to support Starbucks’s management, while others, including Bernie Sanders, slammed the company after the announcement.
"If Starbucks can afford to spend $20 billion on stock buybacks and dividends ... it can afford a unionized workforce,” said Sanders.
The unionization wave at Starbucks emerged in December 2021 in New York after two workers voted to unionize as Starbucks Workers United.
The union is yet to present official requirements to the company’s management, though one of the workers said he hopes it will secure a $25 minimum wage for baristas, in addition to company-provided benefits such as mental health care plans.
The wave spread quickly after that and now more than 100 Starbucks locations across the U.S. have joined the union.