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Starbucks announced that all salaried employees in the United States and Canada will see a 2% pay raise in 2025, a move aimed at supporting workers while the company works to manage costs under CEO Brian Niccol's turnaround plan.

The coffee chain confirmed the increase will apply to store managers, corporate staff, and employees in manufacturing and distribution.

Hourly baristas, however, are not included in the raise. The change marks a shift from past years, when individual managers determined salary increases for their teams.

"This year, we needed to carefully manage all our other costs," a Starbucks spokesperson told Bloomberg, explaining why the company opted for a uniform 2% raise across the board.

Niccol, who joined Starbucks after leading a successful turnaround at Chipotle, has spent the past year trying to restore growth at the Seattle-based coffee chain, Reuters said.

His "Back to Starbucks" plan has included cutting some corporate jobs, adjusting dress codes, and focusing on reducing long wait times for customers.

Starbucks Adopts Zero-Based Budgeting to Manage Spending

The company has also invested in giving baristas more scheduled shifts while reinforcing its coffeehouse-style atmosphere.

Starbucks is balancing these operational changes with tight cost controls. According to BusinessInsider, the company has adopted "zero-based budgeting," a system requiring managers to justify each expense rather than relying on prior budgets.

The decision to limit the salary hike to 2% reflects this cautious financial approach. Meanwhile, Starbucks is still negotiating with its unionized workforce.

In April, members of Workers United rejected the company's latest contract proposal, which included guaranteed annual raises of at least 2% but no immediate pay increase or changes to benefits such as healthcare.

The union argued the offer fell short of what employees need. For many salaried workers, the across-the-board raise provides stability in a year of changes at Starbucks.

However, with rising living costs, some employees and labor advocates say the modest increase may not go far enough.

Niccol's leadership has already reshaped Starbucks' operations, from increasing efficiency in stores to revising policies such as public bathroom access.