ALBAWABA - The Middle Eastern franchisee of Starbucks has initiated the termination of around 2,000 employees from its coffee establishments throughout the region in response to boycotts caused by the Israel-Hamas conflict in Gaza.
AlShaya Group, the retail conglomerate responsible for Starbucks' Middle Eastern operations, is reportedly planning to terminate the employment of over 2,000 workers as a consequence of the extensive consumer boycotts associated with the ongoing Gaza conflict.
The Middle Eastern and North African locations of Alshaya Group, which is headquartered in Kuwait and owns franchise rights for numerous Western brands including Starbucks, H&M, and Shake Shack, have been informed of the redundancies. In light of difficult trading conditions during the previous half-year, the company conveyed remorse regarding the need to downsize its workforce.
According to the information provided by Routers, the workforce reductions, which affect around 4% of AlShaya's total workforce, are predominantly localized in its Starbucks locations throughout the Middle East and North Africa.
Starbucks, which previously employed more than 19,000 individuals in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey, and the United Arab Emirates, is now down to approximately 10% of its workforce.
AlShaya, which was founded in Kuwait in 1890, holds a significant market share as a retail franchisee in the region and possesses exclusive rights to well-known Western brands such as Shake Shack and The Cheesecake Factory. The organization has overseen the operations of Starbucks coffee businesses in the Middle East since 1999, with an estimated 2,000 locations in thirteen countries.
Recent developments indicate that Apollo Global Management Inc., a private equity firm based in the United States, is in talks to acquire a stake in AlShaya's Starbucks business. This highlights the strategic adjustments occurring in the face of ongoing challenges.
A surge in grassroots boycotts directed at Western brands in retaliation for Israel's military actions in Gaza prompted the decision to curtail. Starbucks, specifically, has experienced a decline in business operations throughout both the United States and the Middle East. Starbucks recognized the adverse impacts of the Israel-Hamas conflict on its sales in the region in January, in response to calls for the company to adopt a position on the matter from protesters and boycott campaigns.
In addition, AlShaya recently declared its intention to reduce the scope of its activities in Egypt as a result of economic challenges, which exemplifies the wider consequences of the instability in the region on corporate tactics.
