Starbucks lays off employees in the Middle East amid Gaza-related boycotts

Starbucks franchise operators in the Middle East and Southeast Asia are losing significant sales due to boycotts related to the war between Israel and Hamas, and at least one has started laying off employees.

Alshaya Group, a Kuwait-based franchisee that owns the rights to operate Starbucks in the Middle East, confirmed Tuesday that it plans to cut 2,000 jobs in the region “due to the continued challenging trading conditions over the past six months. ”

Alshaya Group, which operates more than 1,900 Starbucks stores in the Middle East and North Africa and employs 19,000 workers, said in a statement that it would provide affected workers and their families “the support they need.”

The cuts added to the drama unfolding in the United States, where Starbucks management and a union of Starbucks employees sued each other after the union expressed solidarity with the Palestinians.

Starbucks has been forced to debunk the perception that the company has supported and even financed the Israeli government and army. In October, the country released a lengthy statement describing the claims as false, but that has not calmed calls for boycotts in many regions.

Boycotts have also hurt sales of Starbucks franchises in Malaysia, a predominantly Muslim country. Berjaya Food Berhada malaysia-based investment company that develops and operates restaurant and cafe chains across southeast asia, reported last month a A decrease of 38 percent in quarterly sales as consumers turned away from Starbucks’ 400 stores. The company’s share price has fallen more than 20 percent since the beginning of October.

Company founder Vincent Tan, in an interview with reporters on Monday, called on customers in Malaysia to stop the boycotts, saying Malaysians were particularly affected.

“I think anyone boycotting Starbucks Malaysia should know that it is a Malaysian-owned company,” he said. “There is not even one foreigner working at the head office. In the stores, 80 to 85 percent of the employees are Muslim. This boycott does not benefit anyone.”

Starbucks Malaysia website has a blog post saying the company had no political agenda and did not use profits to finance government or military operations. “It is important to note that Starbucks does not have any stores in Israel,” the post added, noting that the company ended a partnership in Israel in 2003. similar message was published on the site for Starbucks in the Middle East.

In January, Starbucks cut its global annual sales forecast as the war between Israel and Hamas hurt its licensees’ operations in the Middle East. The company’s CEO, Laxman Narasimhan, said the company had “had a significant impact on traffic and sales in the region” due to protests and boycotts. He said the effects would also be felt in the United States, “driven by misconceptions about our position.”

Demands by some people for the company to take a stand on the war can be seen on social media and increasingly outside Starbucks stores in the wake of the Hamas-led attack on Israel in October. In his rack Starbucks denied at the time that the company or its former CEO, Howard Schultz, provided financial support to Israel.

Starbucks said it would continue to expand its operations in the Middle East, including by working with the Alshaya Group in developing plans for the region. But those plans appear to be in doubt, at least for now.