Laxman Narasimhan has been removed from his seat as CEO of the Starbucks Corporation after a mere 17 months in the role.
Sales had been declining at the coffee company’s 38,000 worldwide stores under Narasimhan. But his departure also comes amid several other company woes. Management was facing the wrath of activist investors, and there is an active boycott of the chain due to its alleged activity in war-mired Israel. Starbucks has also had to plan to confront the growing unionizing efforts of Starbucks Workers United (SWU), which just this month announced that 15 different Starbucks stores across the country had joined their unionizing efforts. SWU already has more than 470 unionized stores.
In a terse statement, Starbucks said: “Laxman Narasimhan is stepping down from his role as CEO and as a member of the Starbucks board with immediate effect. During his tenure, he improved the Starbucks partner experience, drove significant innovation in our supply chain, and enhanced our store operations.”
Earlier this year, Narasimhan was said to have been willing to restart contract bargaining with SWU, but his newly announced replacement, Chipotle Mexican Grill CEO Brian Niccol, arrives with a strong reputation for being able to wrestle with workers who want to form unions. Prior to working at Chipotle, Niccol was the chief executive of Taco Bell from 2015 to early 2018 and had worked in executive roles at Pizza Hut and at Procter & Gamble.
During his tenure at Chipotle, the company saw only one of its 3,381 store locations successfully unionize and that was in October 2022 in Lansing, Michigan. When a Chipotle in Augusta, Maine began working with the organizers of Chipotle United to unionize in June 2022, management fought back by permanently closing that restaurant location. The National Labor Relations Board (NLRB) later fined Chipotle $240,000 for summarily firing that location’s 24 workers for trying to unionize. On top of the financial fine, the NLRB settlement also called for the company to “offer preferential hiring to these employees for any Chipotle job opening in Maine and post a notice advising employees of their NLRA rights at 40 stores throughout Chipotle’s Northern New England Sub-Region.”
Other incidents at Chipotle included a May 2019 case where a manager at Manhattan’s 117 East 14th Street store threatened to post more difficult shift assignments for unionizing workers. And at Manhattan’s 464 Park Avenue South restaurant, a manager told employees they would be fired for trying to unionize. The NLRB accused Chipotle of violating U.S. labor laws, because the location’s manager had reportedly told employees they could also suffer physical violence for trying to unionize. Workers were also promised the opportunity of a promotion if they told on other employees who were talking about unionizing. In late 2022, Chipotle agreed to pay $20 million to 13,000 New York City workers because it had failed to comply with the city’s Fair Workweek Law, which mandates that employers create 14-day work schedules for hourly, part-time and shift workers that stay the same from week-to-week.
The Starbucks Corporation and its workers have been in an ongoing battle regarding unionizing. The SWU has claimed that Starbucks refuses to negotiate in good faith for a bargaining agreement. Meanwhile, the Starbucks Corporation has accused the NLRB of colluding with SWU to promote union membership.