Starbucks CEO Howard Schultz will step down from his position at the company within the next month. This decision comes after the company’s pledge to hire 10,000 refugees to protest President Trump’s temporary travel halt.
The Daily Mail reports that Howard Schultz will step down from his position as CEO of Starbucks next month. He will continue as executive chairman of the company. Schultz will be replaced as CEO by Starbucks President and Chief Operating Officer Kevin Johnson, who will assume the position of CEO on April 3rd.
In the announcement of his decision to step down as CEO, Schultz stated that he “will shift his focus to innovation, design, and development of Starbucks Reserve Roasteries around the world, expansion of the Starbucks Reserve retail store format and the company’s social impact initiatives and focus on Starbucks next wave of retail innovation.”
Incoming CEO Kevin Johnson assured investors of his commitment to the company saying, “the women and men of Starbucks Leadership Team have become my trusted partners. They support this transition, and I appreciate the passion, creativity, and commitment that each person brings to this team. We work well together and have built a foundation of trust, transparency, and teamwork. I believe we will elevate our collective contribution as we pursue our mission and achieve the company’s ambitious goals.”
Schultz’ resignation as CEO follows his recent commitment to hire 10,000 refugees at Starbucks over the next five years as an act of protest against President Trump’s temporary travel halt. Shortly after this announcement, a YouGov survey showed that the public perception of the Starbucks brand was declining. The survey questioned potential customers and asked if they had, “heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative.”
In the week before the company’s commitment to hire 10,000 refugees, 30 percent of the people surveyed stated that they would consider spending money at Starbucks. After Starbucks’ pro-refugee statement, that number fell to 24 percent. Another study performed by the Swiss financial services company Credit Suisse stated that Starbucks’ comments had negatively impacted sales and damaged the company’s brand.
“Our work shows a sudden drop in brand sentiment following announcement of the refugee hiring initiative on Jan. 29th, to flattish from a run-rate of ~+80 (on an index of -100 to +100). Net sentiment has since recovered but has seen significant volatility in recent weeks,” equity analyst Jason West said, according to CNBC.
Schultz’ departure from Starbucks as CEO also comes shortly after it was reported by the New York Times that former presidential adviser David Gergen stated that “Howard Schultz is definitely being pursued” to run for the Democratic Presidential nomination in 2020.