News: Starbucks trims workforce by around 2,000 employees, citing operational challenges

Talent Management

Starbucks trims workforce by around 2,000 employees, citing operational challenges

Starbucks isn't the only company impacted; McDonald's recently disclosed experiencing a "significant business impact" in the Middle East amid the ongoing conflict.
Starbucks trims workforce by around 2,000 employees, citing operational challenges

Starbucks' franchise operator in the Middle East, Alshaya Group, is reducing its workforce in coffee shops due to a challenging operational environment. This decision comes amidst boycotts targeting the brand over its perceived association with Israel's conflict with Hamas in Gaza. 

CNN reported that the layoffs stem from ongoing difficult trading conditions experienced over the past six months. Regrettably, the company has made the tough decision to reduce the number of employees at its Starbucks outlets across the Middle East and Northern Africa. 

While the company did not provide specific figures regarding the extent of the job cuts, Reuters reported that approximately 2,000 positions were affected. 

“We will ensure that we give our colleagues leaving the business, and their families, the support they need, and we would like to express our deepest thanks for their hard work and dedication to Alshaya Group and the Starbucks brand,” the company said. 

Alshaya, headquartered in Kuwait, has held the rights to operate Starbucks in the Middle East for over 25 years. The company manages approximately 1,300 Starbucks locations throughout the region and employs around 11,000 individuals. 

"Our thoughts are with the green apron partners who will be leaving, and we want to thank them for their contributions," stated a Starbucks spokesperson in a statement. The spokesperson emphasised that the company remains dedicated to collaborating closely with Alshaya to foster long-term growth in this vital region.

Some customers in the Middle East have initiated boycotts against Western companies, perceiving them as having ties to or supporting Israel's conflict in Gaza. Starbucks' recent earnings report fell short of expectations, partly attributed to decreased sales in the region. 

Starbucks is not the only company affected; McDonald's recently announced that it is facing a "significant business impact" in the Middle East due to the ongoing conflict. Similarly, Yum! Brands, the parent company of KFC and Pizza Hut, reported that the conflict in the region had varying degrees of impact on its chains' sales, resulting in reduced same-store sales growth across several countries.

Read full story

Topics: Talent Management, #Layoffs, #HRTech, #HRCommunity

Did you find this story helpful?



How do you envision AI transforming your work?