Starbucks' Franchisee AlShaya To Lay Off 4% Workforce Due to Gaza Conflict Aftermath: Report

Gulf retail giant AlShaya Group, known for its Starbucks Corp SBUX franchise in the Middle East, is reportedly set to lay off more than 2,000 employees due to business setbacks linked to Gaza war-related boycotts.

This decision affects about 4% of AlShaya’s workforce, mainly concentrated in Starbucks outlets across the region, reported Reuters.

The boycotts, triggered by Israel’s conflict with Gaza, have created challenging trading conditions, leading to the reduction in staff, the report added.

The company reportedly assures support for departing employees and expresses commitment to the region.

AlShaya, founded in Kuwait in 1890, holds retail franchise rights for various Western brands, including Starbucks, since 1999.

With around 2,000 Starbucks outlets across the Middle East, North Africa, and central Asia, the company faces significant challenges amid the ongoing conflict.

Additionally, U.S. private equity firm Apollo Global Management Inc APO has reportedly shown interest in acquiring a stake in AlShaya’s Starbucks business.

The war-related boycotts have adversely impacted Western brands, prompting adjustments in business strategies.

The Starbucks chain clarified its non-political stance amidst the conflict and expressed disappointment over missed market expectations.

AlShaya’s decision in January to scale back operations in Egypt due to economic challenges further underscores the regional impact of geopolitical tensions, as per the report.

Also Read: Coffeehouse Compromise: Starbucks Shareholder SOC Pulls Director Nominations Amid Breakthrough In Labor Relations

Price Action: SBUX shares are trading higher by 0.47% at $91.65 in premarket on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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