Former Starbucks CEO Howard Schultz has had a long relationship with the company — he’s served as CEO or interim CEO in three separate stints — and now she says that one of his biggest business mistakes was not taking advice from one of the most famous tech founders in history.
On the “Acquired” podcast last week, Schultz told hosts Ben Gilbert and David Rosenthal about an intense conversation he had with Apple cofounder Steve Jobs in 2008 where Jobs suggested that he fire his entire executive team.
“I think there was a future meeting scheduled for Starbucks and Apple around mobile order and pay and other things,” Shultz said. “I was talking to him on the phone and I’m telling him what’s going on. He said, ‘You should come down.’ He had a whole thing about walking. He would go out and he’d walk around the building.”
So, Starbucks’ then-CEO took a trip to Apple’s HQ in Cupertino and that’s when Jobs dropped a bomb on him that he would never forget.
“I just told him all my problems, everything that was going on. He just stopped me and he said, this is what you need to do. He looked at me and he said, ‘You go back to Seattle and you fire everyone on your leadership team,'” Schultz recalled.
“I thought he was joking. I said, ‘What do you mean fire? What are you talking about? Fire everybody?’ He said, ‘I just told you. F-ing fire all those people.’ He’s screaming at me in my face.”
Schultz said he told the Apple CEO that there was no way he could fire his entire team, to which Jobs cautioned that if he didn’t, the entire team would be gone within six to nine months.
It turns out, that Jobs was correct.
“He was right. Except for one, the general counsel, they were all 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 about all the things you could have done.'”
Schultz served as CEO of Starbucks from 1986 to 2000. He returned in 2008 and stayed through 2017. In 2022, once again he joined as interim CEO before now-CEO Laxman Narasimhan took over.
In September 2023, Schultz officially stepped down from the company’s Board of Directors. The company named him “lifelong Chairman Emeritus.”
“I look forward to supporting this next generation of leaders to steward Starbucks into the future as a customer, supporter, and advocate in my role as Chairman Emeritus,” Schultz said in a press release at the time.
Starbucks had a less-than-desirable fiscal Q1 2024 in the U.S. that missed analysts expectations, per CNBC. Globally, however, the coffee chain saw net sales in Q1 increase by 8% to $9.43 billion. Global same-store sales increased by 5%.
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Starbucks was down just under 19% year over year as of Tuesday afternoon.