Kuwait City, Kuwait – The Middle East franchisee of Starbucks has made the difficult decision to terminate around 2,000 employees at its coffee shops across the region. The Alshaya Group, a private family firm based in Kuwait that holds franchise rights for various Western companies, including The Cheesecake Factory and H&M, announced the layoffs in response to ongoing challenges in the region due to the Israel-Hamas conflict in the Gaza Strip.
The decision to reduce the number of colleagues in Starbucks locations across the Middle East and North Africa comes after six months of challenging trading conditions. Many of the affected employees in the Gulf Arab states are foreign workers from Asian countries. Alshaya operates approximately 1,900 Starbucks branches in countries like Bahrain, Egypt, Jordan, Kuwait, Lebanon, and the United Arab Emirates, among others. The layoffs represent just over 10% of its total staff of more than 19,000 employees.
A spokesperson for Starbucks expressed empathy for the impacted employees, stating that the company is committed to working closely with Alshaya to drive long-term growth in the region. Since the start of the conflict on Oct. 7, Starbucks, along with other Western brands, has faced backlash from pro-Palestinian activists. In response to criticism and misinformation online, Starbucks has clarified that it has no political agenda and does not use its profits to fund government or military operations.
In October, Starbucks took legal action against Workers United, a union that organized employees in hundreds of U.S. Starbucks stores, over a pro-Palestinian message shared on social media. The company sought to prevent the union from using its name and likeness, which had resulted in protests from both pro-Palestinian and pro-Israel demonstrators. Activist boycotts may have contributed to a slight decrease in revenue for Starbucks during the October-December period, despite a record-breaking revenue of $9.43 billion.
Starbucks is not the only brand facing scrutiny during the conflict, as other companies like McDonald’s have also been targeted by activists. Calls for a boycott of McDonald’s arose after a local franchisee in Israel announced free meals for Israeli soldiers in October. The repercussions of the Israel-Hamas conflict have had wide-reaching effects on businesses in the region, prompting difficult decisions and challenges for companies like Starbucks and its franchisee in the Middle East.