Swedish fashion chain Hennes and Mauritz (H&M) announced that will cut 1,500 jobs due to the application of the plan to reduce costs and increase efficiency, presented two months ago, after the drop in profits due to the closure of the business in Russia due to the invasion of Ukraine and the increase in the prices of energy and other raw materials.
The program, which aims to save 2,000 million Swedish crowns (183 million euros) per year from the second half of 2023, will cost approximately 800 million (73 million euros) in restructuring charges, which will be accounted for in the fourth quarter.
“The cost and efficiency program that we have started involves reviewing our organization and we are aware of the fact that some colleagues will be affected. We will support them in finding the best possible solution for their next step,” Helena Helmersson, CEO of the firm, said in a brief statement.
The Swedish group, which has a workforce of more than 100,000 workers, It has 4,664 stores in 77 countries and is also present in 57 markets online.
H&M, main competitor of the Spanish textile distribution firm Inditex, earned 4,430 million Swedish crowns (406 million euros) in the first nine months of its fiscal year (December-August), 30% less year-on-year.
The drop in profits is due to the closure of its business in Russia due to the military intervention in Ukraine, which cost 2,104 million Swedish crowns (193 million euros), and factors such as the increase in the price of raw materials, freight, energy and delivery costs, according to the balance released two months ago.