I worked at Starbucks in high school.
This was 1996 and 1997, when Starbucks had roughly 1,500 stores instead of more than 40,000. I was a part-time hourly employee working around 30 hours per week. The job paid $7.35 per hour when federal minimum wage was $4.75. We got tips, free coffee, and stock options through Bean Stock. We were eligible for healthcare. There was tuition assistance, discounted mortgage programs, and extensive training. Before I was allowed behind the counter, I spent roughly 40 hours in classroom training learning everything from company culture to espresso equipment to how to describe the flavor profile of different coffee blends.
For a teenager, it felt extraordinary.
Today, Starbucks is more likely to be associated with union drives than employee benefits. That raises an obvious question: what happened?
The surprising thing is that many of those benefits never went away. According to Starbucks’ latest Global Impact Report, eligible U.S. employees still receive healthcare, paid parental leave, mental health support, student loan assistance, annual equity awards through Bean Stock, and full tuition coverage through Arizona State University. In fiscal 2024, the average hourly employee earned $18.73 per hour, while total compensation and benefits exceeded $30 per hour. Compared to most hourly retail and restaurant jobs, that remains an unusually generous package.
Our data suggests the answer isn’t benefits.
Using more than 165,000 employee reviews across multiple platforms, Starbucks currently ranks fourth among a peer group that includes McDonald’s, Chipotle, Dunkin, Taco Bell, Burger King, and KFC. The company still ranks near the top on compensation and benefits. The problem is that compensation is no longer where employees are most dissatisfied.
Since 2021, Starbucks’ combined employee ratings have fallen across every major category we track. Overall ratings declined from 3.80 to 3.43. Culture fell from 3.81 to 3.23. Management dropped from 3.26 to 2.79. Work-life balance and career opportunities deteriorated too. Compensation and benefits declined as well, but far less dramatically: from 3.72 to 3.49.
That’s where things get interesting.
The easiest explanation for Starbucks’ labor challenges is that workers simply want higher pay. Compensation is certainly part of the story. It almost always is. But the reviews suggest something else happened at the same time. The nature of the job changed.
When I worked there, the most stressful thing in the store was the Frappuccino. The drink launched while I was employed and immediately became wildly popular. On peak summer days our store sold roughly 1,000 of them, and we never stopped complaining about it. The blenders ran constantly. The lines were long. The workspace felt cramped. At the time, we thought the job could not possibly get more demanding. Importantly, every drink still began with a customer standing in line.
Looking back, it sounds almost quaint.
There was no mobile ordering. No delivery platforms. No algorithmically generated waves of orders arriving simultaneously from customers who had never entered the store. A rush was a rush because people were physically standing in front of you.
Today’s Starbucks employee operates in what is effectively a hybrid retail, hospitality, logistics, and technology environment. A single store may simultaneously serve drive-thru customers, in-store customers, mobile orders, delivery orders, and pickup orders, all while maintaining speed targets and customer service metrics. The benefits improved. The job arguably became harder.
That may explain why Starbucks presents such a paradox. The company still offers one of the strongest economic packages in the industry, yet employee sentiment has deteriorated substantially over five years.
The clearest evidence that pay isn’t the whole story comes from a competitor. Dutch Bros employees rate compensation and benefits lower than Starbucks employees (2.95 versus 3.49), yet report substantially higher culture (3.91 versus 3.23), management (3.21 versus 2.79), and overall satisfaction (3.84 versus 3.43). Same industry, leaner package, happier workforce. Better benefits, it turns out, do not automatically produce a better employee experience.
That observation extends well beyond Starbucks.
For decades, companies competed for workers primarily through compensation and benefits. Healthcare, retirement plans, stock ownership, tuition assistance, and paid leave were the defining markers of a good employer. They’re now part of the baseline. But employee expectations have expanded. Workers increasingly evaluate jobs through a broader lens: staffing levels, scheduling flexibility, workload, manager quality, autonomy, workplace culture, and whether the job feels sustainable day after day.
Starbucks may be one of the clearest examples of that shift. The company still offers many of the same benefits that made it famous as an employer when I worked there nearly thirty years ago.
What changed was everything else around the job. Starbucks became better at delivering coffee. The question is whether it became harder to work there. Employee reviews increasingly suggest the answer is yes.
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The People Team Is Becoming a Cost Center
Uber cut 23% of its People and Places division this week — the organization that covers human resources, recruiting, workplace facilities, and culture. In absolute terms, the cuts are small, well under 1% of Uber’s 34,000 employees. But a large share of the eliminated roles were senior. This was not a recruiter purge. It was a deliberate thinning of the people function itself.
The interesting part is what Uber said about why.
Most companies right now are doing the opposite. A recent survey found that 59% of companies admit they frame layoffs or hiring slowdowns as AI-driven because it “plays better with stakeholders” than saying the real reason is financial constraints. AI has become the respectable cover story for cost-cutting.
Uber went the other direction. It explicitly ruled out AI as a factor in the HR cuts — even though the same company said last month it would slow hiring because of internal AI adoption and disclosed that AI coding assistants have reached 95% monthly adoption among its engineers. So Uber is happy to credit AI for thinning its engineering pipeline and unwilling to credit it for thinning HR.
That asymmetry is the story. The cuts were pitched not as automation but as structure. Uber’s new president told affected employees the organization had grown too complex and fragmented, with overlapping responsibilities and unclear ownership. Translated, the argument is that the company simply does not need this much HR.
That argument is increasingly in the air. A version of it shows up whenever a founder says the quiet part out loud — Bolt’s Ryan Breslow defending his decision to eliminate the company’s HR team entirely is the easy-to-mock extreme — but the extreme is not the interesting case. The interesting case is the boring one: large, profitable companies quietly deciding the people function should be smaller.
It is worth remembering why the function got big in the first place. For years, companies invested heavily in HR technology on a specific promise. Payroll, benefits, onboarding, recruiting, performance reviews, and compliance administration increasingly became software. The pitch was always that automating the administrative work would free HR to become more strategic.
Now the bill on that promise is coming due. The question has flipped: if the administrative work is increasingly automated, and the strategic work is increasingly absorbed by managers, finance, legal, and AI tools, how large does the function need to be?
That question gets sharper when growth slows. HR is rarely the largest department, but it is a textbook cost center — visible, centralized, and far easier to cut than a revenue-producing team. When companies need to fund AI investment, protect margins, or simplify organizational structures, the people team becomes an obvious place to look. Companies are increasingly making that tradeoff explicit. Teradata recently told employees it would pause annual raises while redirecting spending toward AI initiatives.
Here is the trap in that logic. Prevention is hard to measure. Headcount is easy. Good HR is invisible precisely because it stops expensive problems before they happen — bad hires, weak managers, pay inequity, retaliation claims, avoidable turnover, botched terminations. None of that shows up neatly on a dashboard. The cost of cutting too far only appears later, and by then it is usually attributed to something else.
So the modern people function is caught in a squeeze. Software has erased much of the manual administration. AI is beginning to handle the repetitive layer on top of it. Managers want fewer process gates. Executives want flatter organizations. Investors want margin discipline. Employees, meanwhile, still want fairness, development, and someone to call when something goes wrong.
The likely outcome is not “no HR.” It is smaller HR, more automated HR, and far more pressure on whoever remains to prove the function is tied directly to business outcomes.
That is the real signal in Uber. The first wave of HR technology automated the work. The next wave is questioning the size of the function itself. And HR — perhaps more than any other corporate department — is being asked to prove that efficiency gains should not eventually translate into fewer people.
What we’re reading:
- No Raise, No Promotion: 1 in 4 White-Collar Workers Are Stalling Out No promotion. No notable raises. Not yet 40. You aren’t alone. Roughly a quarter of American professionals hit a wall in their careers before their peak earning years, going at least five years without a real boost in pay or position. (Wall Street Journal)
- How DEI Shareholder Proposals Are Faring in 2026 Pro-DEI proposals have declined sharply for the 2026 proxy season, with only 10 proposals submitted through May 31, 2026, compared to approximately 47 submitted for the full 2025 proxy season. Of the five pro-DEI proposals voted on thus far, average support has been approximately 13%, with results varying significantly by proposal category. (Fenwick & West)
- Is A.I. Replacing Tech Workers or Providing an Excuse for Job Cuts? Cutting jobs to make way for A.I. is “a nice excuse, but some of these aren’t necessarily the best, most well-run companies,” said Mark Mahaney, an analyst at the investment bank Evercore. “They may have overhired, or they may be losing market share. There may be other issues.” (New York Times)
- The Great Retreat in Corporate DEI Disclosure: Rhetoric versus Substance When U.S. firms retreat from the language of diversity, equity, and inclusion (DEI) in 10-K filings, do they retreat from the underlying substance, and do investors care? (SSRN)
- Boardroom diversity remains a priority for overwhelming majority 37.4% of respondents saw improving boardroom diversity as a priority within the next six months. A further 45.4% saw it as a priority within the next 12 months, meaning a total of 82.8% saw it as a priority within the space of a year. (Corporate Governance Institute)
- Even with Gender Quotas, the Glass Ceiling Hasn’t Shattered The glass ceiling has proven hard to crack. Despite decades of concerted efforts to increase female representation at the executive level, women still hold less than 30 percent of C-suite positions in the United States. (KelloggInsight)
- The Littler Annual Employer Survey 2026 U.S. employers are bracing for new developments in workplace policy and regulation as technology-related risks – namely around AI and data privacy – take center stage. This comes as businesses adjust to workplace policy shifts following a year shaped by other Trump administration priorities, including immigration enforcement and increased scrutiny of diversity, equity and inclusion (DEI) initiatives. (Littler)