With many of its stores still shuttered due to government mandates aimed at curbing the spread of coronavirus, H&M has mulled the possibility of laying off tens of thousands of workers as its business suffers revenue setbacks amid the global health crisis.
In a statement issued today, the fast-fashion retailer said that it was reviewing its operational costs, as well as taking “several measures” in the areas of buying, investments, rents and staffing. It said it is assessing the situation based on a market by market basis, taking into consideration local conditions. It has also begun discussions regarding temporary layoffs in heavily affected regions, which H&M said is likely to impact tens of thousands of employees in “all parts of the business,” without specifying the exact number.
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“The company is also reviewing the potential need to terminate employment due to the negative impact of the [coronavirus] situation on the business,” read the press release.
All stores in H&M’s biggest markets, including Germany, the United Kingdom and the United States, have temporarily closed. This means 3,441 of the group’s total 5,062 locations are shuttered. Although customers can still shop online, the Swedish retailer said that it has already seen a “significant negative impact” on revenues so far in March, along with “subdued demand” in the markets that remain open.
“We are doing everything in our power in the H&M group to manage the situation related to the coronavirus,” said CEO Helena Helmersson. “My hope is that we will be able to get operations up and running again as soon as possible.”
She added, “This is an extraordinary situation in which we are forced to make difficult decisions, but with every challenge there are also opportunities, and I am convinced that we as a company — once we have made it through this — will continue to stand strong.”
The company is expected to provide more information when it releases its next quarterly financial report on April 3.
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