Starbucks CEO Fired Amid Boycott-Related Sales Slump

Starbucks CEO Laxman Narasimhan has been fired after less than 2 years in the role, following a significant drop in sales linked to consumer boycotts over the company's perceived ties to "Israel." Narasimhan confirmed his abrupt departure on Tuesday, and Brian Niccol, the former CEO of Chipotle, will take over, starting September 9.

Starbucks has faced declining sales for 2 consecutive quarters, with a 4% drop in the first three months of the year and an additional 3% in the following quarter. The boycott, driven by concerns over Starbucks' alleged support of "Israel" during the Gaza genocide, has been a key factor in the downturn. The company's shares have also been affected, falling by around 25% over the past year.

The boycott intensified after Starbucks filed a lawsuit against the Starbucks Workers United (SWU) union for trademark infringement. The union had expressed solidarity with Palestine in a social media post following the October 7 attacks by Hamas. Starbucks accused the union of unauthorised use of its name and logo, leading many to view the company's actions as retaliatory against support for Palestine. This perception fueled further consumer backlash, contributing to the ongoing boycott.

Exechange.com, a company that analyses CEO departures, scores these exits on a scale of 1 to 10, with 1 being entirely voluntary and 10 being clearly fired. Narasimhan’s exit was rated a 9, indicating a clear dismissal. The average CEO departure score in 2024 is 6.2, the highest since the group began tracking the data.

Despite the challenges, Starbucks' shares regained about 20% after Narasimhan's departure was announced, signalling cautious optimism about the company's future under new leadership.

[Cover image: AP Photo/Stephen Brashear]

Sources: CBC / Canadians for Justice and Peace in the Middle East / Business Standard / WSJ