Swedish fashion retailer H&M Group is mulling job cuts as the global spread of coronavirus continues to impact its operations.

The group said at present 3,441 of its 5,062 stores are closed. In the remaining stores, it is seeing subdued demand, which has had “significant negative impact” on sales so far in March.

In a statement, H&M said it is now reviewing all parts of its operations, including all costs.

Several measures are being taken in respect of buying, investments, rents and staffing, among other areas. The situation is being reviewed market by market based on local conditions. 

“Dialogue about temporary layoffs has been initiated in a number of markets and will be followed by further temporary layoffs in other markets that are impacted by the corona situation. Globally, this is likely to affect tens of thousands of employees in all parts of the business, although it is not currently possible to specify the exact number. The company is also reviewing the potential need to terminate employment due to the negative impact of the corona situation on the business.”

It has also said it will not pay a dividend out.

“We are doing everything in our power in the H&M Group to manage the situation related to the coronavirus. My hope is that we will be able to get operations up and running again as soon as possible and welcome back all our customers in all our 74 store markets,” said CEO Helena Helmersson.

“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.”

Earlier this week, the group said it is mobilising its supply chain to produce personal protective equipment (PPE) to be delivered to hospitals and health care workers to help tackle widespread shortages during the Covid-19 pandemic.