H&M’s Bangladesh sheds 46 jobs

Swedish fashion retailer H&M has decided on another big job cut in its Bangladesh office as part of an effort to reduce its operational costs amid a global economic slowdown. 

The retailer is globally laying off a number of its employees under a transformation of the company, sources in the company said.

However, H&M Bangladesh office Stakeholder Engagement and Public Affairs Manager Faisal Rabbi confirmed to The Business Standard that 46 of their colleagues are impacted by the move.

"We are doing our best to support them during this challenging time. During the process, we have followed the law of the land and are ensuring that the rights of our colleagues are respected," he said.

"This change is part of what was communicated in our quarterly report in the autumn of 2022," he added through email communication.

"Our goal is to enhance efficiency and promote increased collaboration by bringing production teams closer together," he added.

The laid-off employees will continue their jobs at H&M till July 2023 as per their official decision.

Earlier in December 2020, the retailer laid off another 101 employees in this office amid the Covid-19 outbreak.

Sources mentioned the move will help foster a true partnership between buyer and supplier despite the job cut.  

H&M will no longer conduct product Quality Control (QC) Inspections and leave the process to its supplier as part of the transformation in the supply chain, they said.

Earlier, 100% of products' QC inspections were conducted by the retailer's officials.

According to industry insiders, H&M has been sourcing apparel from Bangladesh for about 30 years from 250 factories, with a value of more than $3 billion a year.

"We continually evaluate and keep flexibility in our organisational setup to make sure we are well-equipped to adapt and respond to the world changing around us," said Faisal Rabbi regarding the company's supply chain in the coming days.

"We keep the local perspective in mind and our long experience in our sourcing markets, so it doesn't impact our way of working with our long-term business partners," he added.

Meanwhile, local entrepreneurs said the retailer has been gradually downsizing its business, withdrawing orders from small-medium factories and shifting towards larger ones aiming to reduce the number of suppliers since the Ukraine war broke out. 

They fear that H&M may even further shorten its supplier list indicated by abolishing its QC team and reducing its merchandising team.

However, denying such possibilities, Faisal Rabbi said no such changes are part of its ongoing global transformation plans. "We have no plans to change our sourcing strategy."

An H&M official said most of the employees who have been laid off have already got confirmation from local companies to manage their H&M accounts.

He also said these companies will benefit from hiring former H&M staff who have adequate knowledge and experience about the retailer.