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.
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