Starbucks has significantly increased its paid parental leave benefits for US store employees working at least 20 hours a week. Starting in March, birth parents will be eligible for up to 18 weeks of paid leave, a threefold increase from the current 6 weeks, while non-birth parents can take up to 12 weeks. This expanded policy applies to parents welcoming children through birth, foster placement, or adoption.
This change comes as part of CEO Brian Niccol's turnaround strategy for the company, which has faced declining sales and disappointing financial results, including its steepest quarterly sales drop in four years. Niccol, who previously led Chipotle (which offers up to 12 weeks of paid parental leave), took over as Starbucks CEO in September. He acknowledged that the previous parental leave policy was insufficient after hearing feedback from employees.
The move also coincides with unionization efforts by Starbucks Workers United, who had specifically requested increased parental leave in their bargaining proposals, seeking to double the existing benefit. The union has hailed the expanded leave as a victory.
Despite this improvement in benefits, Starbucks has reportedly reduced the size of raises for baristas and decreased bonuses for many corporate employees following the company's poor financial performance. Niccol has outlined a plan to improve the customer experience, acknowledging inconsistencies in service and product quality. His compensation package includes up to $113 million.