H&M on Monday stated that temporary layoffs will likely impact "tens of thousands" of employees in all parts of its business, according to a company press release. The retailer did not reveal the exact number of expected terminations.
The retailer has temporarily closed 3,441 of its 5,062 stores due to COVID-19, including all of its locations in the U.S. The company also decided to cancel its proposed dividend due to the pandemic.
The retailer is reviewing all parts of its operations "market by market based on local conditions," per the release.
H&M is preparing to cut back because of the impact of the coronavirus.
Like many other retailers, the apparel company has temporarily closed the doors to its physical locations. The blow of shuttering a large portion of its storefronts, along with low demand at those still open, has "had [a] significant negative impact on sales so far in March," the retailer said.
"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," CEO Helena Helmersson said in a statement.
Last week, Sourcing Journal reported that H&M and its fast-fashion competitor Zara were halting apparel production because of COVID-19. Many other retailers may be facing a similar situation; Bloomberg reported that, overall, European and U.S. buyers have canceled approximately $1.5 billion of apparel orders from Bangladesh.
In a separate announcement, H&M stated that it will utilize its supply chain to produce personal protective equipment for hospitals and healthcare workers impacted by the pandemic. "H&M Group is, like many other organisations, trying our best to help in this extraordinary situation," said Anna Gedda, H&M Group's head of sustainability.