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Schultz’s Early Moves at Starbucks Suggest Deeper Changes Coming

  • New CEO halted buybacks to spend on staff, redesigning shops
  • Longer-term costly projects may crimp margins further
Howard Schultz
Howard SchultzPhotographer: Alex Wroblewski/Bloomberg
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In his first week back on the job at Starbucks Corp., Howard Schultz made a flurry of moves that hint at big changes in store layouts, employee relations and marketing -- and indicate profit margins will be under pressure.

The man credited with inventing Starbucks’s culture as a “third place” for people to spend time beyond their homes and workplaces isn’t taking his new role as interim chief executive officer lightly. He’s already frozen stock repurchases that were part of a $20 billion package, saying the money would be better spent on employees and cafe improvements. And he dismissed the company’s top lawyer while pledging to offer better benefits for workers to dissuade them from unionizing.