On Monday morning, Starbucks announced that interim CEO Howard Schultz was being replaced by Laxman Narasimhan, a move that had been in the works for months but came sooner than outside observers expected, and less than two weeks before Schultz’s appearance at a high-profile Senate committee hearing, where he’s expected to be grilled about the company’s anti-union practices.
This marks the end of Schultz’s third stint as CEO. He was hired by Starbucks in 1982 to be its marketing director and bought the company in 1987 before turning it into a global chain. He stepped down as CEO in 2000 but stayed on as the company’s chairman, and in 2008, when Starbucks sales were falling, he fired the CEO and returned to the role, overseeing a wave of changes and expansions into Asia. He vacated the CEO post for the second time in 2017 before returning again in 2022.
Under his leadership Starbucks often portrayed itself as a friendly corporate giant; it calls its employees “partners,” provides health insurance and other benefits to full-time workers, and occasionally dips its toe into support for progressive causes — sometimes awkwardly, like when it encouraged its partners to start conversations about race with customers.
But Schultz also has a long history of opposing labor unions and has called the recent explosion of labor organizing in the U.S. a “manifestation of a much bigger problem” in society. His second return to the CEO position coincided with a growing wave of unionization efforts at Starbucks stores. The highest-profile of these early union drives were in Buffalo, New York, and before Schultz came back as CEO he toured those stores and penned an open letter to Starbucks workers that avoided using the word “union.” Wrote Schultz: “No partner has ever needed to have a representative seek to obtain things we all have as partners at Starbucks.”
Starbucks Workers United, the union working to organize the company’s stores, has claimed that Starbucks engaged in aggressive anti-union practices, firing employees involved in organizing and closing pro-union stores. Earlier this month, a federal judge ruled that Starbucks had violated labor laws “hundreds of times.” Vermont Senator Bernie Sanders, who chairs the U.S. Senate committee in charge of labor issues, spent weeks demanding that Schultz appear at a public hearing to answer questions about these practices, which the company agreed to only just before Sanders prepared to formally subpoena the interim CEO. (That hearing is scheduled for March 29.)
Now Laxman Narasimhan, formerly an executive at Pepsi and CEO of British consumer goods company Reckitt, is officially Starbucks CEO. He was announced as Schultz’s successor in September and was to take the top spot starting this April. But on Monday the company said that Schultz will step down now, and Narasimhan will lead the annual shareholder meeting on Thursday.