Starbucks announced plans to lay off approximately 900 non-retail staff and shutter around 100 cafes across North America as part of a $1 billion restructuring plan to revive the struggling coffee giant.

The announcement, made on Thursday, comes as the company faces sharp criticism for its continued support of Israel amid what many describe as an ongoing genocide in Gaza, further fueling calls for boycotts from pro-Palestinian activists.

The layoffs follow the elimination of 1,100 corporate positions earlier this year, with Starbucks also planning to close “many” open or vacant roles. The company attributes 90% of the restructuring costs—totaling $150 million for employee severance and $850 million for store closures—to its North American operations. Starbucks CEO Brian Niccol, in a letter to employees on Thursday, claimed the cuts are necessary to build a “stronger, more resilient Starbucks.” However, critics argue these moves reflect a company in crisis, grappling with declining U.S. sales for six consecutive quarters as inflation-weary consumers reject its overpriced beverages—and as global boycotts intensify over its ties to Israel.

Pro-Palestinian activists have long targeted Starbucks for its perceived complicity in Israel’s actions, particularly following lawsuits against Starbucks Workers United for using the company’s logo in social media posts expressing solidarity with Palestine. Starbucks’ refusal to publicly condemn Israel’s ongoing military operations in Gaza, which have killed tens of thousands of Palestinians and displaced millions, has drawn widespread condemnation. Activists argue that the company’s focus on profits and store “uplift” projects—Niccol plans to revamp over 1,000 locations with “greater texture, warmth, and layered design”—is tone-deaf while Palestinian communities face devastation.

Starbucks Workers United, representing workers at over 650 unionized U.S. stores, slammed the layoffs, stating they highlight a company moving “backwards.” The union, which has been fighting for a first contract since Niccol took over as CEO last September, accused Starbucks of sidelining the workers who drive its daily operations. “Fixing Starbucks requires centering the people who serve customers, not slashing jobs to prop up a failing business model that prioritizes profits over ethics,” the union said. Negotiations with the union stalled after Niccol’s arrival, culminating in the largest strike in the company’s history last December, with workers threatening further action.

The layoffs and closures come as Starbucks faces growing pressure from the global Boycott, Divestment, Sanctions (BDS) movement, which urges consumers to shun companies supporting Israel’s policies. Social media campaigns have amplified calls to boycott Starbucks, with hashtags like #BoycottStarbucks trending alongside images of Palestinian suffering. “Starbucks is cutting jobs and closing stores while funneling support to a regime committing atrocities in Gaza,” said one activist on X. “Every latte you buy funds their complicity.”

Niccol’s letter avoided addressing the union’s demands or the company’s stance on Israel, stating only that the decisions “were not made lightly.” Shares in Starbucks dipped 1% following the announcement, reflecting investor unease as the company navigates both financial and ethical controversies.

As Starbucks pushes forward with its restructuring, pro-Palestinian advocates and unionized workers alike are calling for accountability, demanding the company address its role in supporting Israel and prioritize fair treatment for its workforce. With boycott campaigns gaining momentum, Starbucks’ next steps could determine whether it can salvage its reputation—or face further backlash from a global audience increasingly aligned with the Palestinian cause. (ILKHA)