Starbucks is reducing the raise percentages for its coffee shop employees due to its poorest financial performance since the pandemic. According to an internal document, raises will generally range from 2% to 3% based on tenure, with some exceptions. Last year, retail employees received at least a 3% raise, and those with five or more years received at least 5%.
This year, employees with five years of service will receive a 3% raise or at least 10% above the market starting wage, whichever is higher. Those with two years will see up to a 2.5% raise or at least 5% above local starting wages. Newer employees will get a 2% raise or an increase based on local market rates.
Starbucks has faced customer resistance, price hikes, and slow service, impacting foot traffic and sales. The company hired former Chipotle CEO Brian Niccol, offering over $100 million in compensation, to improve employee experience as part of his turnaround strategy, which includes streamlining menus and adjusting staffing levels.
Barista raises will take effect on December 30, with changes visible in January paychecks. Starbucks aims to continue paying above local minimum wages, influenced by market competitiveness and business performance.
