Sweden: H&M cuts 1,500 jobs – with the help of employee tests

Sweden: H&M cuts 1,500 jobs – with the help of employee tests

1,500 jobs are to be cut at H&M in the Business Tech department. The fashion group wants to use various tests to determine the skills of the employees – and who can keep their job.

The Swedish fashion giant H&M is in an economically tense situation: at the end of last year the chain announced a savings plan; 1,500 of the 3,500 jobs at the Business Tech department in Stockholm – which includes e-commerce, logistics and the development of digital services – are to be cut by the summer.

In order to find out who is allowed to continue working for H&M and who is not, the fashion group uses a series of tests to assess skills, as the Swedish newspaper “Svenska Dagbladet” reports. This should include intelligence and personality tests.

The group’s press department said that the tests would be used to fill positions with the right skills in the future.

“Some have to take up to 30 tests”

The tests are not well received by the employees. According to the head of the local union, Union at H&M, many of them called and cried because they were stressed by the tests. “Some have to complete up to 30 tests,” Robin told the “Svenska Dagbladet”.

“It feels incredibly impersonal,” an employee of the affected department told the newspaper.

According to H&M, it has around 120,000 employees worldwide. There are more than 4600 stores in 77 countries.

However, the company has recently come under financial pressure. Although sales increased last year, profits were around five billion Swedish crowns (equivalent to around 453 million euros) lower than in 2021.

H&M under pressure from war against Ukraine

This is also due to Russia’s war against Ukraine and the resulting high inflation. H&M also withdrew from Belarus and Russia, a previously profitable market for the group.

H&M expects the course to bring annual savings totaling around 2 billion Swedish kroner (more than 180 million euros). According to the group, these should already be noticeable in the second half of this year.

CEO Helena Helmersson said of the redundancies: “The action program we have launched means that we are reviewing our organization and we have great respect for the fact that employees are affected. We will support our colleagues in finding the best possible solution for their next steps to find.”

Despite the tense situation, Helmersson expressed optimism in January. “The external factors are still challenging, but they are moving in the right direction. Together with our investments and efficiencies, there are very good prospects for 2023 to be a year of increased sales, improved profitability and reduced inventories. Our goal, for Achieving a double-digit operating margin for the full year 2024 therefore remains.”

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Source: Stern

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