KFC, Pizza Hut Mideast operator cuts jobs after revamp, boycott

Americana Restaurants International Plc, the Middle East operator of KFC and Pizza Hut, has cut almost 100 jobs in an internal restructuring and amid a consumer boycott of its brands after the start of the Israel-Hamas war.

The firm, which is listed in Abu Dhabi and Riyadh, eliminated the roles after conducting “structure reviews to align our resources with our strategic goals and growth aspirations,” according to a representative for the company.

Americana employs tens of thousands of staff across the Middle East, but most of the layoffs were at its headquarters in Dubai, the representative said.

Driven by anger against the US and Europe for not doing more to get Israel to end its offensive in Gaza, many shoppers in the Middle East, as well as other Muslim nations like Pakistan are shunning big foreign brands, damping sales of some and creating PR headaches for others.

The Americana representative declined to comment on the impact of the boycott and the regional geopolitical tensions, and said the company will provide details of its business and performance in its upcoming full-year results.

‘Challenging dynamics’

JPMorgan Chase & Co last week lowered Americana’s rating to neutral from overweight, citing “more challenging near-term dynamics” such as pressure from “weak sales activity, delayed store opening plans and weaker EBITDA margins.”

The bank found that, by comparing activity trends on Americana’s major apps, its top brands KFC, Pizza Hut and Hardee’s have been impacted in recent months. Egypt, the region’s most populous nation, has been the hardest hit, according to the report.

JPMorgan also cut its growth forecast and revised its estimates for new store openings to account for the current backdrop and longer-term concerns around the shift toward healthy eating.

Shares in Americana, whose majority holders are an investment vehicle owned by Saudi Arabia’s sovereign wealth fund and real estate tycoon Mohamed Alabbar, have lost nearly a fifth since the conflict began in October.

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