Starbucks employee bonuses have dropped by 40% this year!

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Recently, Bloomberg reported that after a dismal fiscal year, employees of the coffee chain will not get full bonuses this year, and some will not even get a performance raise.

Because of Starbucks's poor financial performance, many of the company's employees received only 60 per cent of the company's total bonus for the most recent fiscal year, according to people familiar with the matter. The company's weaker-than-expected financial results for the fiscal year ended Sept. 29 dragged down the overall pay of many employees who achieved their personal goals, the person familiar with the matter said.

According to another document, most Starbucks employees' bonuses are based on the average of individual performance and company performance, with a weighting ratio of about 30% and 70%. Unlike other companies, the bonus weight of employees in some companies is 50-50 between personal performance and corporate performance.

Over the past year, Starbucks' revenue has stagnated, growing by less than 1%, compared with double-digit revenue growth in the previous three years; in addition, Starbucks' consolidated operating profit has fallen by about 8%. According to CNBC, Starbucks' U.S. same-store sales fell for the third consecutive quarter, falling 7% this quarter, the first same-store sales loss since it was hit by the epidemic in 2020.

As a result of its dismal performance, Starbucks employees' bonuses will shrink by nearly 40% this year, and senior managers will not get a performance raise.

The reduction in employee bonuses also reflects the worrying sales performance of Starbucks. Due to the influence of general inflation, American customers have reduced their coffee consumption. At the same time, the poor service quality of the store makes many customers complain that the waiting time for picking up food in the store is too long, the order information is inaccurate, the number of products is reduced, and these bad experiences reduce users' desire to buy.

For this reason, the new CEO Nicole is trying to turn the situation around through a variety of new policies, such as plans to continue to invest in technology and work systems, eliminate complex products, simplify menus, etc., in order to optimize beverage production, reduce the burden of baristas constantly serving drinks to customers during rush hours, and let them complete orders faster.

In addition to improving customer complaints, the CEO also wants to make Starbucks a comfortable third space, so he intends to restore the tradition of handwritten cups that have disappeared since 2012, add ceramic mugs and comfortable seats, restore seasoning tables, etc., to improve the quality of service in stores, so that more people are willing to stay for a while.

However, on Nov. 20, Starbucks filed with the U.S. Securities Regulatory Commission that as of September 29, the number of employees working in coffee stores was 8% lower than last year, while a net increase of 513 stores in the United States. In response, some people think that Starbucks should pay attention to the manpower needs of its stores, rather than adding some little-effective additional services to make it a burden on shop assistants.

It is worth noting that although the news reported by Bloomberg that Starbucks employees' bonuses have shrunk has been confirmed by Fortune and other media, it is not clear whether the impact will affect domestic workers on the other side of the ocean.

Picture from: Internet

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