AlShaya Group, the retail powerhouse holding Starbucks rights in the Middle East, is set to lay off more than 2,000 employees. This decision follows consumer boycotts tied to the Gaza war, impacting almost 4% of AlShaya's 50,000-strong workforce.
The layoffs primarily target the Starbucks franchise in the Middle East and North Africa, reflecting the broader challenges faced by the company. Tough trading conditions, resulting from the six-month-long boycotts, prompted AlShaya's difficult decision, as stated in their official statement.
Despite these measures, AlShaya remains committed to the region and assures support for affected employees and their families. Established in Kuwait in 1890, AlShaya is a major retail franchisee in the Middle East, managing Western brands like The Cheesecake Factory and Shake Shack.
The company has operated Starbucks in the region since 1999, running around 2,000 outlets across 13 countries. Recent talks with US private equity firm Apollo Global Management Inc. about a stake in AlShaya's Starbucks business suggest potential financial manoeuvres.
The backdrop of the layoffs includes a grassroots boycott campaign against Western brands, triggered by Israel's military offensive in Gaza.
The Israel-Hamas war further impacted Starbucks' regional business, with protests and boycotts affecting sales in both the Middle East and the US. AlShaya, reacting to economic troubles, announced scaling back operations in Egypt due to currency devaluations and inflation.
The retail giant faces a complex landscape, balancing geopolitical sensitivities, business survival and public perception, highlighting the intricate interplay between global events and corporate operations.