Starbucks announced on Monday that its corporate employees will be required to return to the office four days a week starting this October.
As part of the announcement, CEO Brian Niccol mentioned that employees who prefer not to return and wish to leave the company can take advantage of a “one-time voluntary exit program with a cash payment,” which is intended to ease the transition.
In his letter to employees, Niccol acknowledged that not everyone may support this decision. “We’ve listened and thought carefully. But as a company built on human connection, and given the scale of the turnaround ahead, we believe this is the right path for Starbucks,” he stated.
Under Niccol’s leadership, Starbucks has been working to revitalize its declining sales in the United States. His approach involves simplifying the menu, enhancing the customer experience, and reducing service time to an average of four minutes per drink.
Following the announcement, Starbucks’ shares fell by approximately 2% in afternoon trading. This decline came after Melius Research advised its investors to sell the stock, citing uncertainties surrounding the company’s turnaround efforts. Despite the drop, Starbucks shares have experienced a 2% increase this year, bringing its market capitalization to $108.7 billion.
The ongoing changes at Starbucks have also extended to its corporate employees. In October last year, just over two months after Niccol took office, the company warned staff that failure to report to the office three days a week could lead to termination. Furthermore, in February, Starbucks eliminated 1,100 positions and announced it would not fill multiple vacancies as part of its restructuring plans.
As of last year, Starbucks employed around 16,000 individuals who work in corporate roles outside of its stores.
Interestingly, Niccol, a long-time resident of Southern California, was not required to move to Starbucks’ Seattle headquarters when he was appointed. His employment agreement included a provision for a small remote office in Newport Beach, California. Although he defaults to working in Seattle when not traveling, this arrangement reflects a degree of flexibility.
Starbucks joins a growing list of corporations urging remote workers to return to traditional office settings. Last year, Walmart mandated that hundreds of its office workers across Dallas, Atlanta, and Toronto relocate to its headquarters in Bentonville. Similarly, in April, several teams at Google informed remote employees they must come back to the office at least three days a week or face job loss.
