Longtime former Starbucks chief executive Howard Schultz announced today that Starbucks will pause billions of dollars of stock buybacks. Â
Shares fell more than 5% after Wall Street opened.Â
Effective immediately, the suspension will allow the company to invest more in employees and stores, Schultz said in a letter to Starbucks workers, customers and shareholders. This comes at a time when the company faces growing unionization of its U.S. workforce.Â
Employees at 10 U.S. Starbucks locations have voted in recent months to join Workers United, an affiliate of the Service Employees International Union. Â
Baristas at more than 170 U.S. locations have petitioned a federal labor board for union elections since August. Â
Ivan Feinseth, chief investment officer of Tigress Financial Partners, says that by suspending share buybacks, Schultz is signaling he wants to make bold moves and shift the company’s cash flow to invest in growth and employees as he tries to fend off unions. Â
“I am returning to the company to work with all of you to design that next Starbucks — an evolution of our company deep with purpose, where we each have agency and where we work together to create a positive impact in the world,” Schultz said in a letter in which he announced he will travel in coming weeks to meet with employees.Â
