H&M to layoff 1,500 employees as retailers face slowing sales and rising costs
The Swedish fast-fashion chain H&M is to cut 1,500 jobs across its global operations as part of efforts to save 2bn Swedish Kroner (£158m) a year, amid slowing sales and rising costs for clothing retailers.
Swedish clothing company H&M has decided to begin terminating 1,500 workers internationally in order to save 2 billion Swedish crowns ($190 million) annually, making it the first major store in Europe to do so. The No. 2 fashion shop in the world is firing staff members in the midst of high inflation and rising costs brought on by the conflict between Russia and Ukraine.
Along with H&M, US food delivery firm DoorDash Inc. has said it would eliminate 1,250 positions to decrease costs. Currently, 155,000 people worldwide work at H&M.
H&M's employment cuts follow closely behind the global layoffs of IT workers by IT corporations. Employees at Amazon, Meta, and Twitter have been let go as part of a wave of layoffs in the IT sector. On November 9, Mark Zuckerberg, the CEO of Facebook's parent firm Meta Platforms, announced the business's decision to let off more than 11,000 workers and cut its team size by around 13%.
Google and HP are now considering layoffs as well. According to reports, Alphabet, the parent company of Google, plans to fire 10,000 "low performing" workers, or 6% of its staff. Enrique Lores, CEO of US IT giant HP, has stated that the business aims to decrease its headcount by 4,000 to 6,000 people over the next three years. Although these are challenging choices, he said, he is acting in the company's best interests.
In September, H&M posted much lower-than-expected quarterly sales as it saw consumers tighten their belts, highlighting its struggle to compete with its bigger Inditex-owned rival, Zara. Additionally, H&M confronts fierce competition from less expensive rivals and online-only firms.
H&M stated that its cost-saving measures will begin to take effect in the second half of 2023, while it will incur a restructuring charge of 800 million Swedish crowns in the last three months of 2019.