AlShaya Group, the retail giant operating Starbucks in the Middle East, is set to lay off 2,000 employees - 4% of its 50,000-strong workforce, Reuters has reported.
The job cuts, which commenced on 3 March 2024, are primarily within its Starbucks franchise across the Middle East and North Africa region (MENA).
The decision comes as the company faces tough trading conditions linked to consumer boycotts over the Gaza war.
The company has not disclosed the specific number of job losses but confirmed the reduction in staff.
Reuters reported a spokesperson as saying: “As a result of the continually challenging trading conditions over the last six months, we have taken the sad and very difficult decision to reduce the number of colleagues in our Starbucks MENA stores.
“Our thoughts are with the green apron partners who will be leaving, and we want to thank them for their contributions.” Starbucks reiterated its intention to work closely with AlShaya for long-term growth in the region.
The extent of the impact of recent events on AlShaya's Starbucks operations, which include 2,000 outlets in 13 countries, has not been detailed by the company.
AlShaya has been a significant retail player in the region since 1980 and has been operating Starbucks since 1999. The group also franchises Western brands such as The Cheesecake Factory and Shake Shack.
Western brands are facing backlash from a boycott campaign triggered by Israel's military actions in the Gaza Strip that followed the deadly Hamas attack in southern Israel on 7 October 2024.
Starbucks has clarified its non-political stance and denied giving any support to the Israeli government or military.
The company acknowledged that the conflict had adversely affected its sales in the region and the US, leading to missed market expectations for first-quarter 2024 results.
In January, AlShaya announced a scale-back of its operations in Egypt due to economic challenges, including currency devaluations and record inflation.
Details on store closures were not provided.
World Coffee Portal had reported in October 2023 that the Alshaya Group was aiming to expand Starbucks in the Middle East to 3,000 stores by 2028, with plans to open 250 new stores annually.
