Swedish fashion giant H&M on Wednesday became the first big European retailer to start laying off staff in response to the cost of living crisis despite a still tight labour market, as it tries to save 2 billion Swedish crowns ($190 million) a year.
The move by the world’s No.2 fashion retailer to reduce mainly back-office staff, comes amid surging inflation and soaring costs related to the Ukraine war which have pressured companies across Europe and the United States to save cash.
The cuts by H&M, which employs roughly 155,000 people, are part of a plan laid out in September to save 2 billion Swedish crowns per year.
It is “symptomatic of the problems facing the fashion retail sector,” said senior analyst at Hargreaves Lansdown, Susannah Streeter, in a note.
“Keeping the lights and heating on in vast stores is becoming increasingly unaffordable with energy prices so volatile,” she added.
