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The Beverly Hills Hotel just lost two more big-name clients, Clive Davis and Jeffrey Katzenberg, because its owner is introducing an Islamic Shariah-based penal code in the oil-rich East Asian country of Brunei.

Sultan Hassanal Bolkiah announced last week that he would push ahead with the criminal code that would eventually include severing of limbs and death by stoning for people who are gay or commit adultery. The Sultan – through the Brunei Investment Agency – owns the Dorchester Collection luxury hotel chain, which manages the Hotel Bel-Air and The Beverly Hills Hotel in Los Angeles.

A source told FOX411 that music mogul Clive Davis moved out of the Beverly Hills Hotel over the weekend as a result of the Sultan’s actions, although his rep did not respond to a comment request.

Large-scale events scheduled to take place at the Beverly Hills Hotel are also running for the doors, including The Motion Picture & Television Fund (MPTF) Night Before Oscars event, a charity affair run by DreamWorks’ CEO Jeffrey Katzenberg.

The Night Before event has been staged at the hotel since 2003.

The Women's rights organization the Feminist Majority Foundation also relocated its Global Women's Rights Awards, co-chaired by Jay Leno and his wife Mavis, that had been scheduled for Monday at the Beverly Hills Hotel. Leno and actress Frances Fisher joined protesters at the famous hotel speaking out against the Sultan.

The teen suicide prevention charity Teen Line forfeited its $60,000 down payment to take the event elsewhere, and the Hollywood Reporter notified the Beverly Hills Hotel that it will not hold its annual Women in Entertainment breakfast there.

The Beverly Hills City Council is meeting Tuesday to discuss a resolution condemning Brunei's new laws, and encourage “the government of Brunei to divest itself of the Beverly Hills Hotel.”

Outraged stars including Ellen DeGeneres, Sharon Osbourne, Stephen Fry and Richard Branson have taken to social media to denounce the hotels, with Branson announcing that no Virgin employee will stay at the Sultan’s Dorchester group “until the Sultan abides by basic human rights.”

Some, however, are concerned that the well-intentioned boycott will hurt the employees of the hotels more than the monarch, whose wealth was estimated by Forbes magazine three years ago to be around $20 billion.

“There are no job losses yet, but there is definitely a feeling of instability and the staff is concerned,” said a source. “Without Hollywood types eating there or staying in the rooms and booking major Hollywood functions, there is no need to keep extra employees on.”

In its statement, MPTF said it “cannot condone or tolerate these harsh and repressive laws and as a result support a business owned by the Sultan of Brunei,” but acknowledged the local fallout. “We sincerely regret that the employees and management of the hotel may suffer because of our response and the response of many other organizations that have aligned against this outrageous and unacceptable legal code.”

Joshua Nass, founder and chairman for Voices of Conservative Youth commended Hollywood's actions.“This is a basic human rights issue and the scores of celebrities calling for this boycott ought to be commended,” he told FOX411.“A combination of corporate and celebrity pressure will have an effect on the hotel's revenue and it should.”

A rep for the Beverly Hills Hotel told us that it is the hotel’s “sincere hope to partner with the MPTF again,” and noted as a whole that while they recognize people’s concerns, they believe the boycott should not directed as hotels and dedicated employees.

“The economic impact of this not only affects our loyal team members but extends to the local community, our valued partners and suppliers,” the rep said in a statement. “Today’s global economy needs to be placed in a broader perspective. Most of us are not aware of the investors behind the brands that have become an integral part of our everyday life, from the gas we put in our cars, to the clothes we wear, to the way we use social media, and to the hotels we frequent."

A rep for the Dorchester Collection issued a statement saying: “We continue to abide by the laws of the countries we operate in and do not tolerate any form of discrimination of any kind. The laws that exist in other countries outside of where Dorchester Collection operates do not affect the policies that govern how we run our hotels.”

And it seems not everyone in Hollywood got the memo – yet. One insider “was shocked” to see Leonardo DiCaprio and Mark Wahlberg dining at the hotel’s famous Polo Lounge over the weekend. Reps for the actors did not respond to a request for comment.

The Sultan’s new law makes Brunei the first country in East or Southeast Asia to implement a Shariah penal code nationally, joining Middle Eastern countries including Saudi Arabia and Iran. The UN’s human rights office and an array of international human rights organizations have vehemently opposed the decision.

Follow @holliesmckay on Twitter.

Danielle Jones-Wesley contributed to this report.