# Starbucks’ Schultz announces halt to stock buybacks, shares fall Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-04-04 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Starbucks Pauses Stock Buybacks as Schultz Returns to Lead Meta Description: Former CEO Howard Schultz announces pause in buybacks, aims to invest more in employees and stores amid rising unionization. Shares fall 5%. URL: https://financedigest.com/starbucks-schultz-announces-halt-to-stock-buybacks-shares-fallhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-04-04t133146z3lynxnpei330b4rtroptp4starbucks-ceo-1736815908245-compressed.jpg) By Hilary Russ NEW YORK (Reuters) -Starbucks Corp will pause billions of dollars of stock buybacks, longtime former chief executive Howard Schultz said on Monday as he returns this week to lead the global coffee chain for the third time. Effective immediately, the suspension will allow Starbucks to invest more in employees and stores, Schultz said in a letter to Starbucks workers, customers and shareholders at a time when the company faces growing unionization of its U.S. workforce. Shares fell more than 5% after [Wall Street](https://www.financedigest.com/wall-street-stocks-power-higher-as-treasury-yields-and-dollar-ease.html "Wall Street stocks power higher as Treasury yields and dollar ease") opened. Starbucks spent nearly $12 billion in fiscal 2019 and 2020 combined to [buy back its own shares](https://www.financedigest.com/uks-bellway-to-buy-back-shares-hike-social-housing-output.html "UK’s Bellway to buy back shares, hike social housing output"). In October it said it would [spend $20 billion](https://www.financedigest.com/chipmaker-infineon-ready-to-spend-billions-on-acquisitions-ceo.html "Chipmaker Infineon ready to spend billions on acquisitions – CEO") over three years on stock repurchases and dividends. Employees at 10 U.S. [Starbucks locations have voted](https://www.financedigest.com/norway-wealth-fund-to-vote-for-labour-rights-motion-at-starbucks-agm.html "Norway wealth fund to vote for labour rights motion at Starbucks AGM") in recent months to join Workers United, an affiliate of the Service Employees International Union. Baristas at more than 170 U.S. locations have petitioned a federal labor board for union elections since August, when the union drive went public. Starbucks announced [last month](https://www.financedigest.com/fintech-trends-to-look-out-for-during-the-last-six-months-of-2019.html "Fintech trends to look out for during the last six months of 2019") that Schultz would take over as interim CEO, following the retirement of Kevin Johnson. [Shares of the coffee chain](https://www.financedigest.com/ge-shares-slump-as-supply-chain-inflationary-woes-threaten-profit-outlook.html "GE shares slump as supply chain, inflationary woes threaten profit outlook") shot up about 5% on March 16, the day of the announcement. By suspending [share buybacks](https://www.financedigest.com/abb-to-launch-1-billion-share-buyback-on-april-3.html "ABB to launch billion share buyback on April 3"), Schultz is signaling he wants to make bold moves and shift the company’s cash flow to invest in growth and employees as he tries to fend off unions, said Ivan Feinseth, chief investment officer of Tigress Financial Partners, which holds Starbucks stock in its clients’ accounts. You have to take the opportunity to invest [money](https://www.financedigest.com/ethical-property-investment-can-your-money-do-more.html "Ethical property investment: Can your money do more? ") where it will get the best return on multiple levels both as a direct investment and to show what the company’s current focus is,” Feinseth said. Schultz is practically synonymous with the company he took over in 1987. During his previous four decades as chief executive and chairman, it grew from 11 stores to more than 28,000 in 77 [markets worldwide](https://www.financedigest.com/intracranial-pressure-monitors-market-is-set-for-a-potential-growth-worldwide.html "Intracranial Pressure Monitors Market is Set for a Potential Growth Worldwide"), according to a news release. Schultz said in the letter that he will travel in coming weeks to meet with employees. I am returning to the company to work with all of you to [design](https://www.financedigest.com/mastering-the-2016-company-logo-design-trend.html "Mastering The 2016 Company Logo Design Trend") that next Starbucks — an evolution of our company deep with purpose, where we each have agency and where we work together to create a positive impact in the world,” he wrote. (Reporting by Hilary Russ, writing by Stephanie Kelly; Additional reporting by Praveen Paramasivan; Editing by Sam Holmes, Kirsten Donovan and Howard Goller) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---