Laxman Narasimhan Replaced As Starbucks CEO

SEATTLE, WA (REUTERS/News Agencies) – Starbucks on August 12 announced that Brian Niccol, the head of Chipotle Mexican Grill, will be its new CEO. This unexpected move comes after the coffee giant’s shares surged over 20%. Niccol will replace Laxman Narasimhan, whose tenure lasted only a year and a half. Narasimhan was appointed in March 2023 to lead a “reinvention” of Starbucks, but the stock has since declined by nearly 25%.

Narasimhan’s brief tenure faced significant challenges, including pressure from activist investor Elliott Investment Management, which holds a $2 billion stake in the company. Elliott had suggested expanding Starbucks’ board and adding Jesse Cohn as a director, though they did not demand a CEO change.

Additionally, former CEO Howard Schultz expressed dissatisfaction with Narasimhan’s leadership, criticizing it in a viral LinkedIn letter in May.

During Narasimhan’s time, Starbucks struggled with increased competition and weakening demand in both the US and China. The company also shifted its focus to mobile pickup and delivery orders rather than traditional cafe visits.

Niccol, known for reviving Chipotle and significantly increasing its sales and stock value, will take over as CEO on September 9. He will be the sixth CEO in Starbucks’ 50-plus-year history. Schultz, who led Starbucks for 23 years in three separate stints, has expressed his respect and support for Niccol.