Starbucks: Mass layoffs due to the pro-Palestinian boycott

The boycott campaigns in response to its alleged support for the Israeli army fighting Hamas in the Gaza Strip have significant consequences for the Starbucks franchisee in the Middle East. It has started laying off staff in its cafes in the region, after the brand was targeted by activists against the backdrop of the Israel-Hamas war, reports the Reuters agency, specifying that it plans to lay off around 2,000 employees. Many of its employees in the Arab Gulf states are foreign workers from Asian countries.

"Due to the still difficult business conditions over the past six months, we have made the sad and very difficult decision to reduce the number of colleagues in our Starbucks MENA stores," announces the Alshaya Group, a private family-owned company based in Kuwait that holds franchise rights for various Western companies, including The Cheesecake Factory, H&M and Shake Shack. The Kuwaiti group owns around 1,900 Starbucks outlets in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey and the United Arab Emirates. The number of people it employed was over 19,000.

Since the surprise and spectacular attack by Hamas on October 7 and the Israeli retaliation in the Gaza Strip, Starbucks and other brands have been the victims of boycott campaigns led by pro-Palestinian activists due to accusations of support for the Israeli army. Since then, the company has been trying to counter what it describes as "the continued sharing of false and misleading information about Starbucks" circulating online. These boycott campaigns are hurting the brand. Starbucks’ revenue increased 8% to a record $9.43 billion for the October-December period, while experts had expected revenue of $9.6 billion.