Policy Shift: Three to Four Days in Office Amid Poor Performance
1,100 Jobs Cut Early This Year to Reduce Costs
Stock Price Remains Weak... 'Sell' Report Issued Previous Day
Starbucks, the world's largest coffee chain, will implement a four-day in-office workweek, a stricter policy than its previous three-day requirement, as part of its normalization plan.
According to reports by the Financial Times (FT) in the UK and the Wall Street Journal (WSJ) in the US on July 14 (local time), Laxman Narasimhan, Chairman and CEO of Starbucks, announced that the new work policy will take effect from the start of the new fiscal year in October.
Manager-level employees are required to relocate to either the Seattle headquarters or Toronto, Canada, within 12 months. Starbucks had already made the same request to vice president-level executives working remotely in February.
For employees who do not agree to the new policy, the company is offering an "opt-out program," which provides a voluntary resignation opportunity along with cash compensation. CEO Narasimhan explained in an internal message that in-person work is important for operational efficiency and corporate culture, emphasizing that the company is at a point where business recovery is needed.
The WSJ noted that this decision is part of CEO Narasimhan's "Back to Starbucks" plan, aimed at cost reduction and management normalization. Since taking office in September last year, he laid off 1,100 of the 16,000 headquarters staff in February this year.
The FT pointed out that this move aligns with the trend among major US corporations to move away from the flexible remote work policies adopted during the pandemic. For example, Amazon, the largest US e-commerce company, adopted a five-day in-office workweek in January this year, representing one of the strictest stances. Global investment bank JP Morgan, after announcing its return-to-office policy in March, disabled the comment function on its internal web page, reportedly due to a surge in criticism and unionization demands among employees, according to the WSJ.
Despite Starbucks' self-rescue efforts since the beginning of the year, its stock price remains sluggish. On July 14, Starbucks closed at $93.42, down 1.52% from the previous trading day. Since the beginning of the year, the stock has risen 2%, but this is far below the market return of 6.88% over the same period. The WSJ reported that the share price decline was triggered by a "sell" report issued by Melius Research the previous day.
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