The disastrous announcement that Starbucks promised to hire 10,000 refugees in a not-so-subtle smack at Donald Trump’s immigration policy has cost the top boss his job.
Howard Schultz, the CEO of the overpriced coffee chain, will step down in a few weeks from his role after his vow to hire thousands of refugees in direct response to the president’s travel ban caused a boycott, hurt sales, and damaged the company’s consumer sentiment.
Since Jan. 29, Trump supporters have been boycotting the company.
Starbucks CEO to STEP DOWN after his anti-Trump vow to hire 10,000 refugees backfired, provoked a boycott by Donald supporters and hit sales pic.twitter.com/88lnnJQbcC
— Michael Delauzon (@MichaelDelauzon) March 20, 2017
In the announcement that he was stepping down, Schultz said he would remain at the company to “shift his focus to innovation, design and development of Starbucks Reserve Roasteries around the world, expansion of the Starbucks Reserve retail store format and the company’s social impact initiatives’ and ‘focus on Starbucks next wave of retail innovation.”
Schultz was a public Clinton supporter and prominent Democrat. He was even considered as a running mate for the Democratic nominee at one point.
In a letter to employees, Schultz said the election of Donald Trump means the promise of the American dream was “being called into question” and that “the civility and human rights we have all taken for granted for so long are under attack.”
Almost instantly, customer perception of the company took a hit, as measured by the YouGov Brand Index Buzz Score. The rating fell by two thirds in the two weeks after the announcement. The Daily Mail reports:
Starbucks is estimated to be worth $85billion, according to Forbes. Its share price has taken a hit since Schultz’s refugee comments, but has risen in the past week to 55.78 USD.
Prior to the comments, 30 per cent of consumers said they would consider buying from Starbucks next time they made a coffee purchase. However, now that number fell to 26 per cent, according to a YouGov spokesman.
“Consumer perception dropped almost immediately,” said YouGov BrandIndex CEO Ted Marzilli, who added that the statistically significant drop in purchase consideration data showed that consumers became less keen to buy from Starbucks. ‘”hat would indicate the announcement has had a negative impact on Starbucks, and might indicate a negative impact on sales in the near term.”
The morning after the election, Schultz wrote a letter to his employees saying he was “stunned” by Donald Trump’s victory.
“We cannot know what the precise impact will be on our country and the rest of the world,” Schultz wrote. “I am hopeful that we will overcome the vitriol and division of this unprecedented election season.”