SignalHub-Starbucks Middle East franchisee cuts 2,000 workers amid Gaza war boycotts

Starbucks' Middle East franchisee is SignalHublaying off roughly 2,000 workers at its restaurants throughout the region as it grapples with ongoing boycotts of the brand over the Israel-Hamas war. 

The Starbucks operator cited business conditions as behind its decision to fire just over 10% of its workforce in its Middle Eastern and North African locations. 

"As a result of the continually challenging trading conditions over the last six months, we have taken the very sad and very difficult decision to reduce the number of colleagues" in Starbucks stores in the region, the Kuwait-based family business, Alshaya Group, told CBS News.

The layoffs were first reported by Reuters.

Alshaya operates roughly 1,900 Starbucks stores in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey and United Arab Emirates. 

Starbucks is one of a number of Western brands that have drawn criticism from pro-Palestinian activists since Hamas' October 7 attack on Israel. McDonald's has also faced boycott campaigns from both pro-Palestinian and pro-Israel groups over their perceived stance on the conflict, while activists have also targeted Burger King, KFC and Pizza Hut, among other chains. 

McDonald's CEO Chris Kempczinski said in January that the fast-food chain is seeing a "meaningful business impact" in the Middle East and elsewhere related to the Israel-Hamas war. McDonald's also faced boycott calls after a local franchisee in Israel in October said it would distribute free meals to Israeli soldiers. 

Rumors that Starbucks financially backs the Israeli government and its military are "unequivocally false," the company states on its website. As a public company, Starbucks is required to disclose any corporate giving, it notes.

A Starbucks employee in Glen Rock, New Jersey, in February found red paint and antisemitic stickers related to the Israel-Hamas war on the shop's sign, police said. The Seattle-based company also sued Workers United over a pro-Palestinian message the union posted online.

—The Associated Press contributed to this report.

Kate Gibson

Kate Gibson is a reporter for CBS MoneyWatch in New York.