Starbucks hired the Lysol CEO to replace interim CEO Howard Schultz


Starbucks has chosen the departing CEO of the British company that makes Lysol to run the venerable coffee business in place of interim CEO Howard Schultz.

Laxman Narasimhan, 55, was chosen as the next CEO of Starbucks on Thursday, hours after announcing his abrupt resignation from Reckitt, which he oversaw for three years after working for American companies PepsiCo and McKinsey.

From London, where he spent the most of the COVID-19 epidemic taking care of his sick mother, Narasimham will now go back to the US. He’ll reside in Seattle, the home of Starbucks.

During his time in London, he was separated from his wife and their two children, who were living in America, due to lockdown procedures.

It happens when Starbucks is going through a difficult time. Over 200 of its US locations have joined the union in the last year as employees fight for improved benefits and pay amid rising inflation.

Michelle Eisen, a member of Starbucks Workers United organising, urged Narasimhan to put a halt to the business’ “scorched earth union-busting effort and cooperate with all Starbucks partners to create Starbucks a better company and better place to work.”

Although Schultz claims he is not anti-union, he has publicly opposed the labour campaign at Starbucks, which had no unionised outlets up until last December.

Schultz has conducted a “listening tour” to learn about employee complaints in reaction to the union movement and has emphasised initiatives to increase worker compensation.

Union officials, meanwhile, claim that the business closes locations that make unionisation attempts and retaliates against employees who do so.

The Department of Consumer and Worker Protection in New York City filed a complaint against Starbucks on Thursday, alleging that the business fired an employee in Queens who was engaged in labour organising without authorization.

According to Starbucks, the employee was let go for fair and legal grounds.

At Reckitt, where 23% of workers were unionised at the end of the previous year, Narasimhan collaborated with unions.

While confronting rising expenses for goods and labour, Starbucks is also changing its emphasis from cafés that promoted prolonged stays to mobile pickup and delivery.

Additionally, one of the U.S. coffee chain’s main international markets has seen a decline in revenue due to COVID limitations in China.

When purchasing Starbucks in 1987 and transforming it into a juggernaut, Schultz stepped out of retirement in April and took over as temporary CEO after Kevin Johnson, the previous CEO, announced his retirement.

Additionally, Schultz rejoined the company’s board and will continue to serve on it even after Narasimhan becomes leadership.

After spending a few months getting to know the firm and its “Reinvention” strategy, which includes providing higher salaries for baristas, enhancing employee welfare and customer experience, and reimagining locations, Narasimhan will formally join Starbucks in October 2023.

Interim CEO Schultz will remain in charge of the business up to that time.

During the transition phase, according to Starbucks, Narasimhan will spend time with Schultz and the management team, working as a barista, getting to know the staff, and touring production facilities and coffee farms.

In a letter formally greeting Narasimhan, Schultz described him as “a strategic and transformative leader with vast expertise in establishing successful consumer brands.”

Moving across the Atlantic will allow Narasimhan to reunite with his family.

Before moving to the UK in 2019 to take over at Reckitt, the Indian-American CEO was headquartered in the US at PepsiCo.

But because of this, he was cut off from the majority of his family throughout the epidemic. He occupied a leased apartment in St John’s Wood, north-west London, with his mother, who needed full-time care throughout COVID.

He was forced to balance taking crucial Zoom calls while the area was under lockdown with opening the door for grocery delivery.

Even though his wife was ultimately able to go to London with him, the pandemic prevented him from seeing their daughter, who lives and works in New York.

His kid will soon begin attending college in the United States.

Although it is painful to go, Narasimhan said, “I have been given the chance to return to the United States and it is the correct option for me and my family.”

Narasimham, an Indian native, has a mechanical engineering degree from the University of Pune and a master’s in German and international studies from The Lauder Institute at the University of Pennsylvania. He was born and raised in India.

He also has a master’s degree in business management from the Wharton School of the University of Pennsylvania.

At PepsiCo, Narasimhan held a number of executive positions, including global chief commercial officer. Additionally, he oversaw operations in Latin America, Europe, and Sub-Saharan Africa as the company’s CEO.

A senior partner at McKinsey & Co., Narasimhan worked on the company’s consumer, retail, and technology practices in the US, Asia, and India.

Since the business was founded in 1999, Narasimhan was the first outside candidate to hold the position of CEO when he joined Reckitt in September 2019.

He guided the business through the pandemic, which increased demand for its health and hygiene goods. More recently, he helped the firm deal with a problem involving infant formula in the US, which resulted in an increase in its annual projection early this year.

Along with Lysol, Reckitt’s other well-liked goods include Durex condoms, Enfamil infant formula, and Mucinex cold medicine.

The 55-year-old, who had previously served as PepsiCo’s global chief commercial officer, won praise from Reckitt investors for his leadership style after he assisted in reviving the business after a decline in sales.

Ashish Sinha, portfolio manager of Reckitt shareholder Gabelli, remarked “He had a really balanced approach to strategy… He didn’t go in all guns blazing—he took a very scientific way to get things right.”

While it comes as a surprise that Starbucks chose a replacement from outside the discretionary industry, Cowen analyst Andrew Charles believes that Mr. Narasimhan’s experience as the CEO of a publicly traded multinational corporation and his expertise in beverages at PepsiCo will benefit Starbucks in the future.

Early Friday trade saw a 1.25 percent decline in Starbucks shares. Since Schultz’s appointment as temporary CEO, they have decreased by 24 percent.


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