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Former Starbucks CEO Howard Schultz has had a long relationship with the company — he served as CEO or interim CEO three times — and now she says one of his biggest business mistakes was not taking advice from one of the most famous tech founders in history.
On the podcast “Acquired” last week, Schultz told hosts Ben Gilbert and David Rosenthal about an intense conversation he had with Apple co-founder Steve Jobs in 2008 in which Jobs suggested firing his entire leadership team.
Related: Howard Schultz retires from Starbucks board after third term as CEO. Meet his successor.
“I think there was a meeting planned between Starbucks and Apple about mobile ordering and payment and other things,” Shultz said. “I got on the phone with him and told him what was going on. He said, 'You should come by.' He had a thing for walking. He went out and walked around the building.”
So the then CEO of Starbucks took a trip to Apple headquarters in Cupertino and there Jobs dropped a bombshell that he would never forget.
“I just told him all my problems, everything that was going on. He stopped me and said, 'This is what I have to do.' He looked at me and said, 'Go back to Seattle and fire everyone on your leadership team,'” Schultz recalled.
“I thought he was kidding. I said, 'What do you mean, fire? What are you talking about? Fire everyone?' He said, 'I just told you. Damn it, fire all these people.' He's screaming in my face.”
Schultz said he told the Apple CEO that there was no way he could fire his entire team, and Jobs warned that if he didn't, the entire team would be gone within six to nine months.
It turned out that Jobs was right.
“He was right. All but one, the general counsel, were gone,” Schultz said. “I've talked to him since then – we were on stage together at an event. I told him they were all gone. He said, 'Well, you're six months, nine months late, man. Think of all the things you could have done.'”
Schultz was CEO of Starbucks from 1986 to 2000. He returned in 2008 and stayed until 2017. He rejoined in 2022 as interim CEO before current CEO Laxman Narasimhan took over.
In September 2023, Schultz officially resigned from the company's board of directors. The company named him “Chairman Emeritus for life.”
“I look forward to supporting this next generation of leaders as they lead Starbucks into the future as a customer, supporter and advocate in my role as Honorary Chairman,” Schultz said in a press release at the time.
According to CNBC, Starbucks had a less than desirable first quarter of 2024 in the U.S., falling short of analysts' expectations. Globally, however, the coffee chain reported an 8% increase in net sales to $9.43 billion in the first quarter. Global comparable-store sales rose 5%.
Related: Starbucks adds sound-absorbing ceilings for quieter stores
As of Tuesday afternoon, Starbucks was down nearly 19% year-over-year.
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