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H&M to lay off 1,100 staff in Spain, close 30 shops

·2-min read
H&M's net profit tumbled tenfold in 2020 as a result of the pandemic, with the fashion retailer saying it would shutter 350 of its 5,000 shops across the globe while opening another 100

Swedish fashion giant H&M will close 30 shops in Spain and lay off more than 1,000 staff who are currently on furlough due to the pandemic, the company and a union said Tuesday.

Hit hard by coronavirus restrictions, H&M said earlier this year it would close 350 of its 5,000 shops worldwide, while opening 100 others in order to adapt to the "increased digitalisation" of the retail industry where online sales have soared.

The retailer said Tuesday that the redundancy in Spain "will affect a maximum of 1,100 employees" and that the closures would be staggered throughout the coming year.

For now, the retailer has not announced layoffs in any other country, saying in Spain it would prioritise "voluntary" departures wherever possible.

But the Workers' Commission (CCOO) union called the shop closures "absolutely disproportionate" and the layoffs of furloughed staff unjustified.

"While it is true there may have been a change in consumer habits which could justify a change in the workforce, this in no way justifies such a large number of redundancies, especially considering that H&M has benefitted from the government's furlough scheme during the pandemic."

- Six-month ban on layoffs -

The funding of such temporary unemployment schemes was one of the key measures put in place by Socialist Prime Minister Pedro Sanchez's government to bolster an economy battered by months of lockdown.

That and other emergency measures to ease the crisis have cost the Spanish treasury a dizzying 40 billion euros (more than $47 billion) since the start of the pandemic.

In return for the funding, companies are banned from laying off staff for six months after the end of the scheme which is currently set to run until May 31, but is likely to be extended.

Asked by AFP if it would reimburse the funding received through the ERTE furlough scheme, H&M said: "According to the current regulations and the conditions under which the company has applied the ERTEs, at this moment we are not subject to any job maintenance commitment."

H&M's net profit tumbled tenfold in 2020 as a result of the pandemic, although its online sales leapt more than 40 percent on the figures for a year earlier, accounting for almost a third of its overall turnover.

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