Starbucks Slashes Workforce: Over 2,000 Jobs Axed in Middle East Amid Business Turmoil Following Boycotts Over Gaza War
As of my last knowledge update in January 2022, I don’t have the latest information on the specific events or developments in the Israel-Hamas conflict or any subsequent impact on Starbucks or AlShaya Group. It’s important to note that my information might be outdated, and I recommend checking the latest news sources for the most recent updates.
In the provided information, AlShaya Group, the Gulf retail giant that owns the rights to operate Starbucks in the Middle East, plans to lay off over 2,000 people due to business challenges linked to consumer boycotts related to the Gaza war. The boycotts have reportedly led to tough trading conditions for the company, particularly affecting its Starbucks franchise in the Middle East and North Africa.
The cuts, which began on Sunday, amount to about 4 percent of AlShaya’s total workforce of nearly 50,000 people. The company mentioned challenging trading conditions over the last six months as the reason for the decision to reduce the number of colleagues in its Starbucks stores. AlShaya expressed its commitment to supporting the departing colleagues and their families.
It’s noteworthy that Western brands, including Starbucks, have faced challenges due to grassroots boycott campaigns over Israel’s military offensive in the Gaza Strip. Starbucks had clarified in October that it is a non-political organization and dismissed rumors of providing support to the Israeli government or army.
Additionally, the information mentions talks between AlShaya and US private equity firm Apollo Global Management Inc regarding a stake in AlShaya’s Starbucks business.
For the most recent and detailed updates on these developments, I recommend checking the latest news sources or official statements from the involved parties.
The AlShaya Group, a major retail franchisee in the Gulf region, has found itself in the midst of operational challenges stemming from consumer boycotts associated with the Israel-Hamas conflict. As the owner of Starbucks’ rights in the Middle East, the group has announced plans to lay off over 2,000 employees, representing about 4 percent of its workforce of nearly 50,000 people.
These layoffs primarily affect AlShaya’s Starbucks franchise in the Middle East and North Africa, reflecting the profound impact of the boycotts on the company’s business operations. The boycotts, driven by grassroots activism, have created difficult trading conditions, compelling AlShaya to make the difficult decision to downsize its workforce.
In a statement addressing the layoffs, AlShaya acknowledged the challenging trading conditions experienced over the past six months. Despite the necessity of these cost-saving measures, the company has affirmed its commitment to providing support to the affected employees and their families during this challenging transition period.
Established in Kuwait in 1890, AlShaya has emerged as one of the region’s largest retail franchisees, boasting rights to operate a diverse portfolio of popular Western brands, including The Cheesecake Factory and Shake Shack. Since 1999, AlShaya has held the rights to operate Starbucks coffee shops across the Middle East, maintaining around 2,000 outlets in 13 countries spanning the Middle East, North Africa, and central Asia.
The decision to lay off employees comes at a time when AlShaya has been exploring potential partnerships, including discussions with US private equity firm Apollo Global Management Inc regarding a stake in its Starbucks business. These discussions underscore the complexities of navigating the evolving business landscape amid geopolitical tensions and consumer activism.
The impact of the Israel-Hamas conflict on businesses like Starbucks and AlShaya has reverberated beyond the Middle East, with the conflict influencing market dynamics and consumer sentiment on a global scale. In January, Starbucks reported that the conflict had significantly affected its business in the region, leading to lower-than-expected first-quarter results. Sales were notably impacted as consumers initiated protests and boycott campaigns, urging the company to take a stance on the issue.
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