Starbucks’ Niccol triples paid parental leave to appease employees
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Nadya So
Starbucks (NASDAQ:SBUX) is tripling the amount of paid leave it will give parents as new CEO Brian Niccol attempts to improve morale and employee retention at the coffee chain.
Birth parents will now receive 18 weeks of full paid leave, compared to 6 weeks of full paid leave and 12 weeks of unpaid leave, previously.
A parent that did not give birth, which includes the spouse or domestic partner of an individual who gave birth, or those who welcomed a child through a surrogate, adoption, or long-term foster care, will now get 12 weeks of full paid leave.
As Niccol takes the helm of the struggling chain, he faces anemic customer traffic, dwindling employee moral and a burgeoning union movement that aims to capitalize on unhappy employees. Although Starbucks (SBUX) offers benefits superior to other fast-food restaurants, employees remain unsatisfied with unpredictable scheduling, unresponsive management, unaffordable healthcare, and unjust retaliation.
Employee morale might be the least of Niccol’s problems. In the fiscal fourth quarter, Starbucks (SBUX) suffered a 6% decline in U.S. comparable store sales and 10% decline in comparable transactions. At the same time, the union was gaining momentum, aligning itself with Workers Union despite management’s efforts to frustrate its expansion.
While the increase in parental leave will pacify employees, its likely impact on the company’s already compromised bottom line is weighing on shares Monday. In its fiscal Q4 results, profits were down 25% year-over-year as global sales dropped 7%.
Shares were down more than 4%, the largest one-day decline since May.