A company’s response to crisis reveals everything about its CEO. Starbucks investors would be wise to take note: their supposedly hot-shot chief executive, Brian Niccol, just offered a master class in how not to handle a restructuring.
More than a week ago, Starbucks announced it was closing about one percent of its “underperforming” stores and taking a $1 billion restructuring charge. Every crisis pro knows the rule: when you’ve got bad news, get it all out at once. Otherwise, you end up with a slow bleed of headlines that scream, “We’re in trouble.”
Starbucks did the opposite. It refused to give reporters a list of shuttered stores, forcing local media to figure it out. That ensured the story would stretch over multiple news cycles as communities learned one by one that their neighborhood Starbucks had disappeared overnight.
The Closures Heard Across America
Some areas got hit hard. More than 40 locations in the Bay Area. Over 20 in Los Angeles ( including six downtown) and dozens in New York City. The New York Post described the process as “chaotic,” reporting that some landlords and building managers learned about the closures when they showed up and found signs taped to the windows.
“They literally put signs in windows overnight without telling landlords and building managers,” Newmark Retail vice chairman Jeffrey Roseman told the publication. “There was no warning, no heads up. There was no outreach to landlords in this case and that’s unusual for a company that’s not in bankruptcy.”
The Rush Job
The Wall Street Journal offered some insight on why the process was so sloppy. Niccol wanted the job done by the end of Starbucks’ fiscal year, September 29. “Transparently, this is a really quick turnaround,” one regional leader told store managers as they scrambled to dump excess inventory — cups, oat milk, lemonade, you name it.
My read: Niccol’s “turnaround” isn’t ahead of schedule, as he told Wall Street last quarter. So, Niccol did what every insecure and myopic American CEO does — he reached for a short-term fix that looks decisive on paper. Cost cuts and layoffs always give investors goosebumps. The stock popped 2.6 percent on the news.
Union Politics Percolating
What the mainstream media hasn’t noticed is how aggressive Starbucks Workers United (SWU) has become. The union now represents about 12,500 baristas in 45 states and D.C. — 650 stores and counting, even in the Deep South, where organizing is no small feat.
Local coverage of the store closings featured predictable outrage from union members alleging Starbucks unfairly targeted unionized locations, some 59 in total. Maybe. Or maybe Niccol was telling the truth when he said the company was closing underperforming stores that couldn’t deliver the “superior customer experience” he claims is critical to his revival plan.
If so, then Starbucks locations with unionized workers might very well be lagging — not because of union-busting, but because the employees are too busy waging political battles to make a decent latte.
That’s not a wild assumption. Starbucks Workers United is part of the Service Employees International Union (SEIU), one of the most militant and partisan labor groups in America. The SEIU was the first major union to endorse Joe Biden, pours millions into Democratic campaigns, bankrolls progressive ballot measures, and proudly brands itself as a political force.
SWU follows that playbook to the letter. It’s not trying to help Niccol fix Starbucks; it’s trying to use the brand as a megaphone for its identity politics. The union’s activism might thrill SEIU’s D.C. handlers, but it’s poison for a consumer company that depends on customers of all political stripes.
The Charlie Kirk Smear
Two years ago, Starbucks sued the union over a pro-Palestinian post from an SWU social-media account. SWU’s logo resembles Starbucks’ branding, and some customers mistakenly assumed the post was company sanctioned. The backlash was swift. SWU countersued, claiming Starbucks defamed the union by implying it supported terrorism.
Let’s pause here. Whatever one’s view of the Middle East, Starbucks sells coffee, not foreign policy. Israel — the only democracy in the region — has one of the world’s strongest labor unions. Its powerful Histadrut federation publicly called for a cease-fire and renewed humanitarian aid for Gaza months ago. Hamas and every other authoritarian regime in the area, by contrast, restrict unions altogether.
The point is simple: a mass-market company can’t afford to alienate customers over global politics. Yet the Starbucks union keeps trying.
Case in point: The New York Times in recent days ran an op-ed by Cassie Pritchard, a Starbucks Workers United member, who took a viral video of a barista refusing to write “Charlie Kirk” on a cup and turned it into an indictment of Kirk — and conservatives generally.
Pritchard accused Kirk of “consistently denigrating” queer, nonwhite, and immigrant people and called him an “expert practitioner” of humiliation and “effigy politics.” She even suggested that Kirk’s rhetoric helped precipitate his own killing — the same sort of claim that got Jimmy Kimmel suspended after making a tasteless on-air joke about Kirk’s assassin. Disney — one of the most politically correct corporations in America — briefly yanked his show for the inflammatory remark, but The New York Times, not surprisingly, had no issue repackaging it.
That the Times published such a one-sided union screed isn’t shocking. The publication’s own newsroom has been roiled by union walkouts.
From the Front Counter
This morning, a power outage forced me from my usual haunt, Peet’s. Out of caffeine desperation — not brand disloyalty — I walked into one of the remaining Starbucks in my West L.A. neighborhood. Consider it field research.
Although there was no line, I still waited five minutes for a tasteless cup of coffee that left sediment on the bottom. The loud music made quiet conversation difficult. A Peet’s regular I often see lingering for hours lasted only a few songs before he bolted, muttering his own colorful assessment of the staff’s collective IQ. Another familiar Peet’s face told me he found the store equally unbearable.
Oh, and there was no personalized message on my cup, which Niccol says is critical to his turnaround efforts.
Niccol’s Questionable Company
If Niccol somehow pulls off a turnaround, he’ll deserve every penny of his compensation. But every passing week raises new doubts about his judgment. He recently recruited former Yahoo! CEO Marissa Mayer — one of the most disastrous leaders in tech history — to Starbucks’ board. Wired reported last week that Mayer’s consumer AI startup had folded, which the publication termed a “flop.”
You can’t make this stuff up.
Adding to Starbucks’ turmoil, the company’s head of information technology, Deb Hall Lefevre, reportedly resigned, and her interim replacement is curiously based in Atlanta, not in Seattle where Starbucks is headquartered and employees are mandated to work from the office four days a week. Niccol, of course, lives in Southern California and travels on the corporate Gulfstream when his presence is needed at headquarters.
Niccol reportedly has turned to a consulting firm in India for IT support. Outsourcing work on Starbucks’ digital backbone — at a time when mobile orders, loyalty data, and cybersecurity are critical to its brand — hardly inspires strategic confidence.
And in what feels like an omen, fast-growing Dutch Bros. has applied to take over the site of a shuttered Starbucks in San Jose. Dutch Bros. apparently sensed an opportunity to make lemonade from Brian Niccol’s discarded lemons.