Starbucks Middle East franchisee to lay off almost 2,000 workers

Middle East franchise of Starbucks announces layoff of almost 2,000 workers due to protest against the brand resulting from Israel-Hamas conflict

The Middle East franchisee of Starbucks, run by the Kuwait-based Alshaya Group, announced on Tuesday that they will lay off almost 2,000 workers due to the escalated tensions surrounding the Israel-Hamas war. The action was taken as a result of the well-known coffee company being targeted by protestors during the continuous unrest in the Gaza Strip.

Alshaya Group, a well-known private family business that has the franchise rights for a number of Western companies, including The Cheesecake Factory and H&M, acknowledged the layoffs that had occurred at its Starbucks locations around the Middle East and North Africa. The company’s main justification for the decision was the persistently challenging business circumstances throughout the previous half-year.

The layoffs, which were verified by Alshaya, mostly impact Asian migrant workers, who make up a significant chunk of Starbucks’ staff in the Gulf Arab states. Based on data from the Seattle-based Starbucks Corporation, the franchisee employs over 19,000 people and runs about 1,900 Starbucks locations throughout Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Türkiye, and the United Arab Emirates. The latest layoffs account for somewhat more than 10% of the whole workforce.

Like many other Western corporations, Starbucks has been singled out by pro-Palestinian activists throughout the current Israel-Hamas conflict. The business has responded by stepping up its efforts to dispel what it regards as “ongoing false and misleading information” that has been spread about its activities. Starbucks has highlighted that it is apolitical and that it does not use its money to fund military or governmental endeavors.

When Starbucks filed a lawsuit against Workers United, a union that represents workers in hundreds of Starbucks locations nationwide, over a pro-Palestinian social media post in October, the investigation became more intense. Pro-Palestine and pro-Israel organizations both staged demonstrations in response to the divisive statement, with some accusing Starbucks of not doing more to aid the Palestinians in Gaza.

Starbucks missed analysts’ estimates even though it reported an 8% growth in sales to a record $9.43 billion for the October–December quarter; this might have been partly due to boycotts spearheaded by activists. As the business dealt with the aftermath from the battle and the ensuing customer mood, its financial performance suffered.

Source:AP