Starbucks’ Middle East franchisee, Alshaya Group, is cutting
thousands of jobs at its coffee shops because of a “challenging” work
environment as the chain grapples with boycotts over the brand relating to
Israel’s war against Hamas in Gaza.
In a statement to CNN, Alshaya said the layoffs are the
“result of the continually challenging trading conditions over the last six
months” and that it’s “taken the sad and very difficult decision to reduce the
number of colleagues” at its Starbucks locations in the Middle East and
Northern Africa.
The company didn’t specify how many jobs were cut, but
Reuters first reported that it amounts to 2,000 people. Alshaya didn’t refute
that report.
“We will ensure that we give our colleagues leaving the
business, and their families, the support they need, and we would like to
express our deepest thanks for their hard work and dedication to Alshaya Group
and the Starbucks brand,” the company said.
Kuwait-based Alshaya has owned rights to operate Starbucks
in the Middle East for more than 25 years and operates around 1,300 locations
across the region, employing about 11,000 people.
“Our thoughts are with the green apron partners who will be
leaving, and we want to thank them for their contributions,” a Starbucks
spokesperson said in a statement, adding that the company “remains committed to
working closely with Alshaya to drive long-term growth in this important
region.”
Customers have boycotted Western companies in the Middle
East for what they perceive as the businesses supporting or having ties to
Israel’s war in Gaza. Starbucks’ most recent earnings report missed
expectations, partially because of weaker sales in the region.
Starbucks isn’t alone: McDonald’s said last month that it’s
experiencing “meaningful business impact” in the Middle East because of the
war. Yum! Brands, which owns KFC and Pizza Hut, said its chains’ “sales were
impacted by the conflict in the Middle East region with varying degrees of
impact,” which dented same-store sales growth in several countries.
