Following a statement made in September that it was implementing a “cost and efficiency programme”, Hennes & Mauritz (H&M) Group said it has initiated a global restructure programme starting today (30 November) to reduce costs and further improve efficiency in the business. The programme relates to administrative and overhead costs, and also entails reducing the workforce by around 1,500 positions.
Overall, it is estimated that this will provide annual savings of around SEK2bn which are expected to become visible in the second half of 2023. H&M says the programme is expected to result in a restructure charge of just over SEK800m in the fourth quarter of 2022.
“The cost and efficiency programme that we have initiated involves reviewing our organisation and we are very mindful of the fact that colleagues will be affected by this. We will support our colleagues in finding the best possible solution for their next step,” says Helena Helmersson, CEO.
During the third quarter ending 31 August, H&M said it was impacted by a one-time cost of SEK2.1m related to the winding down of its Russia operations. Operating profit excluding the one-time cost for Russia was SEK3bn versus SEK6.3bn (US$264.6m) on a year earlier corresponding to an operating margin of 5.2% (versus 11.3% a year earlier).
Recently, the Swedish retailer outlined steps to more than halve emissions throughout its value chain by 2030. The goal is to slash its absolute scope 1 and 2 emissions and its scope 3 emissions by 56% respectively. H&M said it is implementing an annual budget of around SEK3bn (US$283.4m) towards this.
In the last couple of weeks, brands like the e-tailer Asos confirmed it entered into a restructuring phase which will see a review of several job roles across the business. A spokesperson for Asos told Just Style: “Simplifying and reducing our cost profile is a core part of ASOS’ change agenda that was outlined at full-year results. As part of this, we have taken the tough but necessary step to outline proposals to reduce the number of roles across the business.