Published by Jessica Weisman-Pitts
Posted on April 4, 2022
3 min readLast updated: February 8, 2026
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By Hilary Russ
NEW YORK (Reuters) -Starbucks Corp will pause billions of dollars of stock buybacks, longtime former chief executive Howard Schultz said on Monday as he returns this week to lead the global coffee chain for the third time.
Effective immediately, the suspension will allow Starbucks to invest more in employees and stores, Schultz said in a letter to Starbucks workers, customers and shareholders at a time when the company faces growing unionization of its U.S. workforce.
Shares fell more than 5% after Wall Street opened.
Starbucks spent nearly $12 billion in fiscal 2019 and 2020 combined to buy back its own shares. In October it said it would spend $20 billion over three years on stock repurchases and dividends.
Employees at 10 U.S. Starbucks locations have voted in recent months to join Workers United, an affiliate of the Service Employees International Union.
Baristas at more than 170 U.S. locations have petitioned a federal labor board for union elections since August, when the union drive went public.
Starbucks announced last month that Schultz would take over as interim CEO, following the retirement of Kevin Johnson. Shares of the coffee chain shot up about 5% on March 16, the day of the announcement.
By suspending share buybacks, Schultz is signaling he wants to make bold moves and shift the company’s cash flow to invest in growth and employees as he tries to fend off unions, said Ivan Feinseth, chief investment officer of Tigress Financial Partners, which holds Starbucks stock in its clients’ accounts.
“You have to take the opportunity to invest money where it will get the best return on multiple levels both as a direct investment and to show what the company’s current focus is,” Feinseth said.
Schultz is practically synonymous with the company he took over in 1987. During his previous four decades as chief executive and chairman, it grew from 11 stores to more than 28,000 in 77 markets worldwide, according to a news release.
Schultz said in the letter that he will travel in coming weeks to meet with employees.
“I am returning to the company to work with all of you to design that next Starbucks — an evolution of our company deep with purpose, where we each have agency and where we work together to create a positive impact in the world,” he wrote.
(Reporting by Hilary Russ, writing by Stephanie Kelly; Additional reporting by Praveen Paramasivan; Editing by Sam Holmes, Kirsten Donovan and Howard Goller)
A stock buyback occurs when a company purchases its own shares from the marketplace, reducing the number of outstanding shares. This can increase the value of remaining shares and is often used to return capital to shareholders.
Employee engagement refers to the emotional commitment employees have to their organization, which influences their willingness to perform at their best. Engaged employees are more productive and contribute positively to the company's culture.
Corporate governance is the system by which companies are directed and controlled. It encompasses the practices and policies that ensure accountability, fairness, and transparency in a company's relationship with its stakeholders.
A dividend is a portion of a company's earnings distributed to shareholders, typically in cash or additional shares. Dividends provide a return on investment for shareholders and are often paid quarterly.
Unionization is the process by which workers come together to form a union to represent their collective interests in negotiations with employers regarding wages, working conditions, and benefits.
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