(Reuters) -Starbucks will provide a modest 2% hike to all salaried employees in North America this year, the company told Reuters on Monday, as the coffee chain tries to keep a tight lid on costs as part of CEO Brian Niccol’s turnaround efforts.
Starbucks, under Niccol, has cut some jobs, tightened dress codes and incentivized keeping costs under control for executives as it invests in reducing service wait times and returning to a coffeehouse environment at its stores.
Bloomberg News first reported on the hike, and added that the raise will apply to all corporate staff, workers in manufacturing and distribution, as well as store managers.
The hikes for salaried employees were thus far decided by managers, but as the company invests in Niccol’s turnaround plan, Starbucks needed to “carefully manage all our other costs”, Bloomberg’s report said, citing a company spokesperson.
Starbucks is also in the midst of contract negotiations with unionized baristas.
In April, union delegates voted to reject the coffee chain’s latest proposal that guaranteed annual raises of at least 2%, which the Workers United union said did not offer changes to economic benefits such as healthcare or any immediate pay hike.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Vijay Kishore)
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