Skip to main content
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

H&M Cuts 1,500 Jobs as Inflation Hits Demand

All brands with revenues of greater than $100 million that transact in New York State are covered by the Act, which effectively means all major fashion brands, from Louis Vuitton to H&M.
All brands with revenues of greater than $100 million that transact in New York State are covered by the Act, which effectively means all major fashion brands, from Louis Vuitton to H&M. (Shutterstock)

Swedish fashion giant H&M on Wednesday became the first big European retailer to start layoffs by announcing 1,500 job cuts owing to softening demand as consumers cope with soaring inflation.

The move by the world’s No.2 fashion retailer comes as surging cost of living and the blow from the Ukraine war hurt consumer spending and pressured companies across Europe and the United States to save cash.

The cuts by the company, which employs roughly 155,000 people, are part of a plan launched in September to save 2 billion Swedish crowns per year.

The company said the savings would start to kick in from the second half of next year, while it will take a restructuring charge of 800 million Swedish crowns ($75.80 million) in the fourth quarter.

ADVERTISEMENT

“We are in a big transition and the whole retail industry is facing a lot of challenges,” H&M’s investor relations head Nils Vinge told Reuters, pointing to headwinds from the pandemic, the Ukraine war and rising input, freight and energy costs.

“It’s very clear that when consumers have paid for their food ... energy, gas, and so on there is less to spend. So what is obvious is that demand for value for money increases”.

The lion’s part of the cuts would be made in Sweden, Vinge said.

While high-street retailers are struggling due to stiff competition from online-only brands, British fashion retailer Primark has recently announced plans to add 1,800 jobs in Spain and Britain as it benefits from shoppers trading down in price.

By Stine Jacobsen, additional reporting by Terje Solsvik in Oslo; editors: Louise Heavens and Arun Koyyur.

Learn more:

H&M Considers Charging for Online Returns to Cut Costs, CEO Says

The company is trying out the fees in Norway in coming days, embracing a measure that rivals have turned to as well, chief executive officer Helena Helmersson said.

In This Article
Topics
Organisations

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Retail
Analysis and advice from the front lines of the retail transformation.

What a Fashion Company Is Worth Today

In an era of austerity on Wall Street, apparel businesses are more likely to be valued on their profits rather than sales, which usually means lower payouts for founders and investors. That is, if they can find a buyer in the first place.


What’s the Plan at H&M?

The fast fashion giant occupies a shrinking middle ground between Shein and Zara. New CEO Daniel Ervér can lay out the path forward when the company reports quarterly results this week.


view more

Subscribe to the BoF Daily Digest

The essential daily round-up of fashion news, analysis, and breaking news alerts.

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
BoF Professional - How to Turn Data Into Meaningful Customer Connections
© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions, Privacy Policy, Cookie Policy and Accessibility Statement.
BoF Professional - How to Turn Data Into Meaningful Customer Connections