Starbucks Tells Employees To Work Reduced Hours Or Take Unpaid Leaves, As Demand Falls Despite Post-Lockdown Ease

Starbucks Corporation SBUX has told employees it is further reducing working hours to match reduced demand, even as coronavirus lockdowns are eased, the Wall Street Journal reported Monday.

What Happened

The coffee chain company said employees could either choose to work reduced hours or take unpaid leaves through September, according to the Wall Street Journal.

Starbucks reopened a majority of its stores in the United States early May, after nearly two months of a shutdown, but kept its in-store seating closed.

The Journal suggested that the Seattle-based company is expecting to stick to pick-up, delivery, and drive-thru for its sales through September, at least, justifying its decision to keep reduced working hours and staff.

Many Starbucks restaurant owners have particularly expressed concerns about ensuring the safety of both workers and customers if operations are rolled back to full-scale, according to the Journal.

Why It Matters

Starbucks' decision comes as companies that have resumed full-scale operations, or remained operating during the pandemic as essential businesses, have struggled to keep workers safe from catching the coronavirus.

The coffee chain had reported earnings per share of 32 cents for its second quarter in April, down 46.7% year-on-year, and the company also said it expected the coronavirus impact to intensify in the third-quarter.

Starbucks Price Action

Starbucks shares closed 0.4% higher at $78.32 on Monday. The shares dropped 1% in the after-hours at $77.51.