OSLO (Reuters) – Sweden’s H&M group said on Wednesday it was cutting 1,500 jobs, becoming the first major European retailer to resort to layoffs in the face of falling demand amid high inflation.
The decision by the world’s number two fashion designer comes as rising costs of living and the aftermath of the war in Ukraine weigh on consumer spending, prompting European and American companies to cut spending.
The job cuts at H&M, which employs around 155,000 people, are part of a plan launched in September to save 2 billion Swedish crowns (183.08 million euros) a year.
The company expects to start making savings from the second half of 2023, while it will pass a restructuring charge of SEK 800 million in the fourth quarter.
“We are in a period of significant transition and the whole retail sector is facing many challenges,” Nils Vinge, head of investor relations at the group, told Reuters, referring to the headwinds linked to the pandemic. , the war in Ukraine and rising input, freight and energy costs.
“It’s very clear that when consumers have paid for their food…energy, gas and so on, they have less left to spend. So obviously the demand for value for money increase”.
The biggest job cuts will be in Sweden, he added.
As retailers face stiff competition from brands sold online, British clothing chain Primark recently announced plans to create 1,800 jobs in Spain and Britain to take advantage of lower prices.
(Reporting Stine Jacobsen With the contribution of Terje Solsvik; French version Dagmarah Mackos, editing by Kate Entringer)
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