The Kuwait-based Alshaya Group, which operates Starbucks outlets in the Middle East and North Africa (MENA) region, announced on Tuesday that it would lay off 2,000 workers due to challenging trading conditions over the past six months. The decision comes amid calls for boycotts of Starbucks linked to the ongoing conflict in Gaza.
Alshaya Group expressed sadness over the layoffs and highlighted its long-standing partnership with Starbucks in the MENA region, spanning over 25 years and encompassing more than 1,300 coffee shops and 11,000 employees. The company stated that affected workers would be provided with support during this challenging time.
Boycott calls against Starbucks gained traction on social media platform TikTok after the coffee giant sued Workers United, a Starbucks employees’ union, in October for trademark infringement. The lawsuit was in response to a now-deleted social media post from the union’s account that shared an image of a bulldozer breaking through the barrier between Israel and Gaza, accompanied by the comment “Solidarity with Palestine!”
Starbucks denounced the post as “reckless and reprehensible” and emphasized its condemnation of violence in the region. The union has since countersued Starbucks.
Renewed support for boycotts targeting companies associated with or perceived to support Israeli policies, particularly in the occupied West Bank, has emerged amidst the ongoing conflict in Gaza, which has resulted in significant casualties according to local health officials.
Starbucks reiterated its stance as a nonpolitical organization, emphasizing that neither the company nor its former chairman or CEO provides financial support to Israel’s government or army. Instead, Starbucks highlighted its commitment to working with partners in the region to create job opportunities for local communities.
In Malaysia, where boycott calls against Starbucks have gained traction among some customers, Vincent Tan, founder of the conglomerate that owns Berjaya Food Berhad, which operates Starbucks franchises in the country, addressed the issue. Tan emphasized that Starbucks Malaysia is owned by BFood, a Malaysian company, and underscored that the boycott does not benefit anyone. He noted that the company does not employ any foreigners in its head office or stores.
The impact of the boycott sentiment was reflected in reports of a 38 percent decline in revenue for Berjaya Food Berhad in 2023 compared to the previous year, indicating the economic repercussions faced by Starbucks franchise operators in regions where boycott calls have resonated.
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