Starbucks Middle East Franchise Initiates Layoffs Amid Boycott Amidst Israel-Hamas Conflict – Sky Bulletin

In light of recent activism related to the Israel-Hamas conflict, the Middle East franchisee of Starbucks, the Alshaya Group based in Kuwait, announced on Tuesday that it has commenced the termination of its staff across several regions. This decision comes as a repercussion to the brand being ensnared in a boycott connected to the ongoing tensions in the Gaza Strip.

Alshaya Group, which also has franchising rights for other Western brands including The Cheesecake Factory, H&M, and Shake Shack, confirmed that it had been impelled to streamline its workforce in the Middle Eastern and North African stores due to the prevailing difficult trading conditions of the past half-year.

The specifics regarding the number of employees affected by the layoffs were not made public by Alshaya. However, Reuters reported that the figure exceeded 2,000. The company’s employees in the Gulf Arab region are predominantly expatriates from Asian countries.

The franchisee operates roughly 1,900 Starbucks outlets in countries such as Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates, with its workforce previously exceeding 19,000, as per Starbucks’ records from Seattle.

Since the outbreak of hostilities on October 7, Starbucks, among other Western brands, found itself in the crosshairs of pro-Palestinian campaigners. The coffee shop chain has been actively debunking what it calls “ongoing false and misleading information” that has permeated the web about its operations.

Reiterating its stance, Starbucks stated, “We have no political agenda. We do not use our profits to fund any government or military operations anywhere — and never have.” Furthermore, the brand engaged in legal action against Workers United, a group that has unionized workers in numerous U.S. Starbucks establishments, challenging a pro-Palestinian declaration made on one of the union’s social platforms.

Although Starbucks experienced an 8% increase in revenue, reaching an all-time high of $9.43 billion during the October-December quarter, this figure fell short of the anticipated $9.6 billion, perhaps impacted by the aforementioned boycotts. It’s noteworthy that Starbucks isn’t the singular target; other brands, such as McDonald’s, have also faced boycotting calls after one of its Israeli franchisees extended free meals to Israeli soldiers in October.

Why is Starbucks being boycotted in the Middle East?

Starbucks has been targeted by pro-Palestinian activists because of perceived associations with Israel in the wake of the Israel-Hamas war in the Gaza Strip. Despite the company’s efforts to clarify their position, the boycott has affected their business in the region.

How many employees is Starbucks Middle East laying off?

The exact number of layoffs has not been disclosed by Alshaya Group, but reports from Reuters suggest it could be over 2,000 staff members.

What is Starbucks’ stance on the political conflicts in the region?

Starbucks has reaffirmed that it does not have any political agenda and that it doesn’t use its profits to fund government or military operations.

Has Starbucks taken any legal actions regarding this situation?

Yes, Starbucks has filed a lawsuit against Workers United, a union representing their employees, for a pro-Palestinian message shared on social media.

Are other brands besides Starbucks being boycotted?

Yes, other Western brands such as McDonald’s have also been targeted by pro-Palestinian activists.

The complex geopolitical climate of the Middle East has spilled over into the commercial domain, affecting international franchises like Starbucks. The recent wave of boycotts, driven by the Israel-Hamas conflict, has compelled the Starbucks Middle East franchisee to execute a series of layoffs in response to the downturn in business. While the company maintains a non-political stance, the broader socio-political movements continue to shape the operational and economic landscape for businesses in the region.