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A franchise operator that runs Starbucks outlets in the Middle East and North Africa region said Tuesday that it will lay off 2,000 workers amid calls for boycotts of the American coffee giant linked to the ongoing war in Gaza.
"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," the Kuwait-based Alshaya Group said in a statement, using the acronym for the Middle East and North Africa. The news was first reported by Reuters.
"Alshaya Group has been the licensed partner for Starbucks in MENA for over 25 years and we are extremely proud of the business we have built, with over 1,300 coffee shops and 11,000 colleagues," the company said, adding that the affected employees will be provided with support.
The American coffee giant became embroiled in boycott calls on TikTok after it sued Workers United, a union of Starbucks employees, in October for trademark infringement over a since-deleted social media post from the union’s account that retweeted an image of a bulldozer breaking through the barrier between Israel and Gaza. The post added the comment, "Solidarity with Palestine!"
The company said it condemns violence in the region and described the post as "reckless and reprehensible." The union has countersued.
Calls for the boycott of companies associated with or seen as aiding Israeli policies, particularly in the occupied West Bank, have found renewed support amid Israel’s punishing war in Gaza, where local health officials say more than 30,000 people have been killed.
In an earlier statement, Starbucks had said neither the company nor its former chairman or CEO provide financial support to Israel’s government or army, highlighting that it works with partners in the region to provide thousands of jobs to locals. "Starbucks has been and remains a nonpolitical organization," it said.
But some customers, particularly in Muslim-majority countries, have heeded these boycott calls.
The Starbucks franchise operator in Malaysia is also feeling the heat.
"I think all those who are boycotting should know that Starbucks Malaysia is owned by BFood, which is a Malaysian company. We don’t even have one foreigner working in head office or stores. So, I think this boycott doesn’t benefit anyone," Vincent Tan, founder of the conglomerate that owns Berjaya Food Berhad, said this week.
Local media had reported a 38 percent decline in the company’s revenue in 2023 from a year ago on the heels of the Starbucks boycott sentiment.
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