Starbucks will scale back pay increases for its coffee shop workers in light of the company's worst financial results since the pandemic, an internal document shows. The documents show that salary increases generally range from 2% to 3% depending on seniority, but there are exceptions. A year ago, the company announced that retail employees would receive a salary increase of at least 3%, and employees with five or more years of service would receive a salary increase of at least 5%.
This year, hourly workers who have been on the job for five years will receive a 3% raise, or at least 10% above the market starting wage, whichever is higher. Employees who have been with the company for two years will receive a raise of up to 2.5%, or have their salary raised to at least 5% above the starting salary in their area.
Recently hired employees will receive a 2% salary increase, or an increase above the starting salary in their local market, depending on the length of their employment.
Customer boycotts, price hikes and slow service have contributed to Starbucks' foot traffic and sales falling during a tumultuous past year. In response, the company hired former Chipotle boss Brian Niccol as CEO and offered him a package worth more than $100 million. He pledged to improve the work experience for employees as part of his plan to revive performance. His strategy includes streamlining menus, adjusting staffing and more.
The document shows the barista pay increase will take effect on December 30, and employees will see the change in pay on January 10 or January 17, depending on their pay period. Starbucks said it will continue to pay above the local minimum wage in all U.S. markets. Salary increases depend on factors such as market competitiveness and operating performance.
"This year, Starbucks is willing to invest a lot of resources to secure senior management talent, but the company needs to increase investment in partners in all aspects of the entire system," said Michelle Eisen, head of Starbucks Workers United, which represents about 5% of Starbucks baristas.
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