Four years ago, generous benefits and opportunities for advancement convinced Leigh Swanson to use her new master’s degree in human resources to manage a Starbucks cafe. She called it one of the best workplaces she had ever experienced.
Then, in 2007, with the coffee chain in the midst of a building binge, the worst downturn since the Great Depression hit, hammering Starbucks’ bottom line. Sharp cost cuts, the introduction of corporate efficiency tools like scheduling software and an increased emphasis on pushing product sales have helped the company return to record profitability.
They also led Swanson to quit in May. The disappearing perks and the financial fixes dampened her enthusiasm for recruiting potential new Starbucks employees. “I found it really sad. I was really invested,” said Swanson, who was in charge of a Starbucks in the Florida Panhandle. “I just didn’t feel proud anymore. I wasn’t in it to manage a McDonald’s.”
Disillusionment among Starbucks workers like Swanson may be early signs of a culture change that could strike at the heart of Starbucks: that warm, fuzzy feeling stemming from its original commitments to the global community as well as its own healthy, happy staffers who provide service with a smile.
Of course, Starbucks’ cafe workers are not the only ones being asked to work more for less. But the world’s biggest coffee-seller built its reputation as the anti-McDonald’s. Its culture underpins the “Starbucks experience” that draws loyal customers back to pay a premium for fancy coffee drinks that they could get for less somewhere else.
For now, Wall Street is all smiles; shares in Starbucks Corp have nearly tripled from recent lows and appear poised for more gains.
But the question is whether Starbucks can keep growing if the Starbucks culture unravels.
Execs say economy to blame, not them
For its part, the company insists that its commitment to workers remains as strong as ever.
“Starbucks from Day 1 was intended to be not only a place for a great cup of coffee, but also an exceptional place for people to work,” says Kalen Holmes, Starbucks’ executive vice president of partner resources. “The reality is that the recession caused us, like most companies in the United States, to have to make some really, really tough decisions.”
Focusing only on the bottom line
Trimming around the edges is what gnaws at many of Starbucks’ hourly workers who earn close to minimum wage.
Erik Forman, a Starbucks barista in Minnesota’s Mall of America and a member of the scrappy IWW Starbucks Workers Union, said cafe workers bore the brunt of management’s hard decisions but have not shared the rewards of the turnaround.
“If Starbucks is doing what every other company is doing,” Forman asked, “then what makes it a different kind of company?”