Job Losses As Starbucks Boycott Grows in US and Middle East, Despite Company Refuting Claims It Supports Israel
The coffee giant stands out among numerous Western brands facing mounting pressure from consumers who urge companies to take clear position in condemning Israeli aggression in Gaza
Amid a worldwide outcry against Israel's actions in the besieged city of Gaza, the world's largest coffee company continues to find itself in the eye of the storm, as employees of Starbucks franchisees in the Middle East and Southeast Asia are set to lose jobs, months after the market value of the company dropped billions of dollars.
The Kuwait-based Gulf retail giant Alshaya Group has held the rights to operate Starbucks in the Middle East for over 25 years. With approximately 1,300 locations scattered across the region, the company employs about 11,000 staff. It is reportedly slashing over 2,000 jobs.
These job cuts make up approximately 4 percent of its nearly 50,000-strong workforce, with the majority occurring within its Starbucks franchise in the Middle East and North Africa.
“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,” AlShaya said.
Starbucks is at the forefront of several Western brands facing increasing pressure from consumers demanding that companies take a stance on Israeli aggression against Palestinians, with over 31,000 killed to date. Last December the Seattle based coffee company reported a drop in nearly $12 billion in market share value.
How Starbucks Distancing Itself from A Pro-Palestine Position Backfires
However, insiders claim that Starbucks issues have been self-inflicted, when early on in the Gaza war it took a stance that seemingly sided with Israel.
The coffee giant stirred controversy and instigated a boycotting campaign when it emerged that it had retaliated against Starbucks Workers United, an employee labor organization, who posted a Palestinian solidarity message on Oct. 11 on X (formerly Twitter), which was soon deleted.
This was after Pro-Israel customers started an earlier boycott, claiming the message was Pro-Hamas with the likes of Sen. Rick Scott of Florida posting, "If you go to Starbucks, you are supporting killing Jews."
The company filed a lawsuit against the union to stop it from using its name and logo. Starbucks insisted to AMT and other media in several press releases that it had no official stance on the war and that the union's post might confuse customers.
However, Starbucks’ decision to support and respond to the outcry from Jewish business groups and right wing political figures was widely seen as taking a side. This led to the union responding with its own lawsuit, claiming it had defamed Starbucks Workers United by implying that its members support terrorism and violence through their solidarity with Palestine.
“Starbucks is seeking to exploit the ongoing tragedy in the Middle East to bolster the company's anti-union campaign," Workers United President Lynne Fox wrote in a letter to Starbucks. Incidentally
more than 350 of the company’s roughly 9,300 corporate-owned stores in the United States are now unionized.
The whole affair has put Starbucks on the defensive. Its "cleaning act" involved a position statement that it sent to AMT, addressing long-standing claims regarding the coffee company's historical business connections to the state of Israel. The statement clarified, "Neither Starbucks nor the company's former chairman, president, and CEO Howard Schultz provide financial support to the Israeli government and/or the Israeli Army in any way."
Starbucks Fails to Meet Market Expectations Amid Controversy
But the harm was already evident. By January, Starbucks admitted that the Gaza conflict had impacted its business, with sales figures in both the Middle East and the US confirming that the company fell short of its first-quarter market expectations, losing millions in share value.
Starbucks CEO Laxman Narasimhan stated that those protesting against the company over its position on the Israel war have been "influenced by misrepresentation on social media" regarding the coffee chain's values and beliefs.
Despite Not Being on BDS List, Why Activists Call For Starbucks Boycott
Interestingly, there are no Starbucks stores in Israel or the Palestinian territories. However, there is a notable "Star & Bucks" Café located in downtown Ramallah in the West Bank. This café uses a shade of green in its logo that closely resembles the branding of the Starbucks chain it imitates.
Starbucks is also not on the official, pro-Palestinian Boycott, Divestment, Sanctions (BDS) list of companies to boycott due to their economic or business ties that support Israel. The BDS movement, initiated nearly two decades ago, is a Palestinian-led initiative, and is akin to the world-wide boycott of South Africa when it enforced its racist apartheid rule.
Human rights agencies and UN officials have said Israel is also practicing apartheid when it comes to the treatment of Palestinians.
Despite its non-violent nature, critics argue that the movement unfairly targets Israel and is a form of antisemitism or hate speech. Numerous U.S. states have implemented anti-BDS laws, penalizing companies involved in boycott or divestment actions against Israel.
The ACLU and civil rights groups in the U.S reject this and have argued that neither Israel nor its supporting companies should be exempt from scrutiny, and view such legislation as an infringement on ‘political expression.’
“We don’t even have one foreigner working in the head office. In the stores, 80 to 85 percent of employees are Muslims. This boycott doesn’t benefit anyone.”
The BDS movement has understandably thrown its support behind Starbucks' labor union, leading to renewed calls for boycotting the company. This unity carries particular weight in a climate where accusations of antisemitism are used to silence those who denounce Israel's occupation and war atrocities, along with corporate involvement in these actions.
However, one unfortunate consequence of this unified stance is that the livelihood's of Starbucks employees, particularly those working in Muslim-majority countries, are being impacted in a conflict they oppose.
Malaysian franchise head Vincent Tan, appealed to customers in Malaysia to stop the boycotts, saying it was mainly hurting their people. “I think all those who are boycotting Starbucks Malaysia should know that it is a Malaysia-owned company,” he said. “We don’t even have one foreigner working in the head office. In the stores, 80 to 85 percent of employees are Muslims. This boycott doesn’t benefit anyone.”
Amina, a cashier working at a Dubai branch reflected, “The consumer boycott has gravely affected sales. But to be honest, we've become victims of this war.” She is unsure of her future at the company as she admits downsizing is “inevitable.”
