The American coffee giant Starbucks is enduring one of the most challenging phases in its recent history, following the announcement of a US$1 billion restructuring plan that includes closing underperforming cafés across North America and laying off approximately 900 employees. The move comes as the company struggles to recover from strikes and widespread boycotts triggered by accusations of supporting the Israeli occupation during the war on Gaza that erupted in October 2023.
In a statement on Thursday, the company confirmed that most closures would be finalised before the end of the current fiscal year, resulting in a reduction in the number of cafés across the United States and Canada.
According to official figures, Starbucks will close the year with approximately 18,300 stores, down from 18,734 outlets reported in July.
CEO Admits Painful Cuts
Chief Executive Officer Brian Niccol told employees:
“We have identified cafés where we cannot provide the environment our customers expect, or where we see no viable financial path forward. These locations will be shut down.”
He added that job cuts will also affect some support teams, while certain vacant positions will be scrapped altogether. Niccol acknowledged the decision was painful, but described it as necessary to stabilise the company.
Falling Sales and Investor Concern
Starbucks’ share price slipped 0.7% to US$83.66 in the latest trading session. The company has now reported declining sales in the American market for six consecutive quarters, with rising prices and intensified competition reducing consumer demand—particularly for its signature lattes.
Impact of the Boycott
The popular boycott campaign against Starbucks in the Middle East has played a decisive role in weakening its performance. Alshaya Group, one of the company’s largest regional franchise operators, was forced to lay off around 2,000 employees due to difficult trading conditions, partly driven by the boycott.
In its financial results for the third quarter of 2025, Starbucks recorded a 2% drop in sales at stores open for more than 13 months in North America. Despite repeatedly denying accusations of supporting the Israeli occupation, the company has admitted that boycott movements are negatively impacting its operations across several markets.
A Web of Challenges
Niccol further admitted that Starbucks faces multiple challenges beyond the boycott and falling sales, including:
- Operational inefficiencies, such as long waiting times at cafés.
- Rising prices, discouraging many customers from frequent purchases.
- Consumer belt-tightening, as households reduce discretionary spending.
The combination of these pressures has left the company grappling with a shrinking customer base and a reputation crisis, especially in Muslim and Arab markets where solidarity with Gaza remains strong.
Conclusion
Starbucks’ struggles highlight the power of grassroots boycotts in holding corporations accountable. Despite corporate denials, the company has openly acknowledged the economic impact of campaigns protesting its alleged complicity with the Israeli occupation. As closures mount and jobs are cut, the message from consumers remains clear: profits cannot be placed above principles, and silence in the face of oppression comes at a cost.
They still have money to fund a holocaust, stop murdering the Palestinian Muslims and resume the profits?