Starbucks fires CEO amid decline in revenue

Starbucks has fired its Indian-origin CEO Laxman Narasimhan, reportedly amid a decline in revenue it emerged on Wednesday.

The company’s financial performance showed a slight decline, with global store sales down 3% and shares losing value. Laxman Narasimhan, who succeeded Kevin Johnson as CEO in 2023, took over leadership during this period.

Starbucks said Tuesday that Brian Niccol, chief executive at Chipotle, would be the coffee chain’s new CEO,  just over a year after current boss Laxman Narasimhan took over the role.

Narasimhan steps down as chief executive and as a member of the Starbucks board “with immediate effect,” said the company in a statement.

Starbucks shares were around 21 per cent higher in early afternoon trading, while Chipotle Mexican Grill shares fell by about eight per cent.

American multinational chain of coffeehouses, Starbucks is reportedly facing a challenging period marked by boycotts due to the Gaz genocide.

Lynne Fox, president of the Workers United union, said in a statement: “We look forward to continuing to work with Starbucks to resolve massive outstanding litigation and reach fair collective bargaining agreements in the coming months.”

“The replacement of Laxman Narasimhan as Starbucks CEO is the result of growing dissatisfaction, particularly from activist investors, over the way the chain has been run,” said Neil Saunders, managing director at GlobalData, in a statement.

“While some of the slowdown can be attributed to a more sluggish consumer cutting back, much is also the result of a worsening store experience and a lack of innovation in areas like food,” he added.

Meanwhile, investors hope for improvements in day-to-day operations by bringing Niccol on board.

“Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth,” said Starbucks board chair Mellody Hobson in a statement as the company announced the leadership changes.