After becoming the first major European retailer to lay off staff, Swedish fashion giant H&M has decided to start laying off 1,500 employees globally, which will help it save 2 billion Swedish crowns ($190 million) a year . The world’s No. 2 fashion retailer is laying off staff amid high inflation and rising costs due to the Ukraine-Russia war.
Besides H&M, US food delivery service DoorDash Inc has also said it is cutting about 1,250 jobs in an effort to rein in costs.
H&M currently employs approximately 155,000 people globally. H&M CEO Helena Helmersen was quoted as saying by the news agency, “The cost and efficiency program we have started involves a review of our organization and we are very conscious of the fact that colleagues will be affected by this.” reuters As in saying.
Globally, IT companies are laying off their employees, in such a situation, jobs are being cut by H&M. In a series of layoffs in the IT sector, Amazon, Meta and Twitter have laid off employees. Mark Zuckerberg, CEO of Facebook’s parent company Meta Platforms, said on November 9 that the company has decided to reduce the size of its team by about 13 percent and let go of more than 11,000 employees. Twitter has also laid off 50 percent of its employees.
Now, Google and HP are also planning layoffs. Alphabet, Google’s parent company, is reportedly preparing to lay off about 10,000 “underperforming” employees, or 6 percent of its workforce. Enrique Lores, CEO of US tech giant HP, has also said that the company will cut down the size of its workforce over the next three years and is expected to reduce it by 4,000 to 6,000 persons. He said that although these are difficult decisions, he is doing what is best for the company’s business.
H&M reported lower-than-expected quarterly sales in September as it saw consumers tighten their belts, highlighting its struggle to compete with larger Inditex-owned rival Zara. H&M also faces stiff competition from cheaper rivals and online-only brands. British fashion retailer Primark has announced plans to expand as well as add 1,800 jobs in Spain and the UK.
Hargreaves Lansdowne’s Streeter said: “Shoppers are showing signs of trading down and looking for bargains, so the pressure is on for H&M to compete with chains offering more value, from Primark in the High Streets to Boohoo and Sheen online until.” Reuters report.
H&M said its savings would begin in the second half of next year, while it would take a restructuring charge of 800 million Swedish crowns in the fourth quarter.
(with inputs from agencies)
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