On Tuesday, the Middle East franchisee of Starbucks announced that it has started laying off approximately 2,000 workers from its coffee shops throughout the region. This decision comes after the brand was singled out by activists during the current Israel-Hamas conflict in the Gaza Strip.
The Kuwait-based Alshaya Group, a private family firm that holds franchise rights for several Western companies such as The Cheesecake Factory, H&M, and Shake Shack, released a statement confirming the layoffs at its locations in the Middle East and North Africa.
The statement mentioned, “Due to the persistently difficult trading environment in the past six months, we have made the regrettable and tough choice to downsize the workforce in our Starbucks MENA stores,” Alshaya stated.
Alshaya later verified that it was letting go of approximately 2,000 employees, as initially reported by Reuters. A significant number of its workers in the Gulf Arab states are foreign nationals from Asian countries.
Alshaya runs about 1,900 Starbucks branches in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey and United Arab Emirates. It had employed more than 19,000 staff, according to the Seattle-based company. The layoffs represent just over 10% of its staff.
Since the start of the war on October 7, Starbucks, along with other Western brands, has been singled out by pro-Palestinian activists. The company has been actively working to combat what it perceives as misinformation circulating online about Starbucks.
Starbucks clarified, “We do not have any political motives. Our profits are not used to support any government or military activities anywhere, and this has always been the case. “
In October, Starbucks filed a lawsuit against Workers United, a union that has organized employees in over 370 U. S. Starbucks stores, due to a pro-Palestinian message that was shared on a union social media account.
Starbucks stated that it was attempting to prevent the union from using its name and image, as the post had sparked protests from pro-Israel groups. Additionally, boycotters believed that the company was not sufficiently supporting Palestinians in Gaza.
Despite Starbucks’ revenue increasing by 8% to a record $9. 43 billion in the October-December period, it fell short of the $9. 6 billion forecasted by analysts, possibly due to the impact of activist boycotts.
Activists have not only targeted Starbucks during the war, but also other brands. McDonald’s faced calls for a boycott after a franchisee in Israel declared in October that it would offer complimentary meals to Israeli soldiers.