The AlShaya Group, which is the franchise holder of Starbucks in the Middle East, is planning to lay off 2,000 employees. This is equivalent to about four percent of its total workforce of 50,000. The majority of the affected employees work for the Middle East and North Africa franchise of Starbucks, according to a Reuters report.
AlShaya has been operating various Western brands in the region since 1890, when it was established in Kuwait. It has had the rights to operate Starbucks coffee outlets in the Middle East since 1999.
The job cuts have already begun and are mainly being attributed to the boycott of Western brands in the wake of the war in Gaza, which began almost six months ago. The conflict has negatively affected business in the area, with first-quarter results falling below expectations. The company has also been facing pressure to take a stance on the Gaza issue, which has impacted sales not just in the Middle East but also in the US.
AlShaya has reportedly assured that affected employees and their families will receive relevant support and assistance. The Starbucks unit operates approximately 2,000 outlets in 13 countries across the Middle East, North Africa, and Central Asia.
Earlier this year, in January, AlShaya announced plans to scale back operations in Egypt due to economic conditions, inflation, and currency devaluation. In February, it was reported that the Kuwait-based AlShaya Group was planning to sell a minority stake in its Starbucks franchise business in the Middle East. At the time, US private-equity firm Apollo Global Management Inc, and the Public Investment Fund (PIF) of Saudi Arabia had shown interest in acquiring a stake.
