H&M, one of the largest global apparel makes, has cut more than 100 careers from Bangladesh production business office mainly to cope up with the rapid improvements in the retail sector amid the Covid-19 pandemic, sources said.
The Swedish retailer, which has been sourcing readymade garment (RMG) items from Bangladesh for last 27 years, is currently slowly but surely withdrawing its businesses from tier three or silver category factories and shifting towards platinum-and gold-rated ones, they added.
It sources more than $3.0 billion worth of outfits items annually from more than 250 factories in Bangladesh, according to the industry insiders.
When asked, H&M Bangladesh country manager Ziaur Rahman said they manufactured some structural improvements in the company to become more agile and customer centric.
In order to react to the rapid changes in the retail industry also to meet the new demands of H&M customers, the Group is
growing its organisation to become even more productive, fast moving and agile, explained Ulrika Isaksson right from H&M Group Communications Division.
"As part of this change, we've taken the challenging decision to decrease the quantity of workers at our production business office in Bangladesh by 101 folks," she told the FE via an email communication.
H&M features approximately 650 employees in its production office in Bangladesh.
Responding to a issue, she said these staff members is definitely the group's primary priority in this technique, and that they might fulfill their obligations according to local labour laws requirements.
While it is critical to stay flexible because of uncertainties with the way the pandemic will develop, the group has a long-term making and sourcing strategy, she said.
"We have been present in Bangladesh for a lot more than 27 years and the united states is normally, and will continue being, an important production marketplace to us," she explained, giving an answer to a question if the massive cut would have any effect on its sourcing from Bangladesh.
The team in Bangladesh will continue steadily to drive the growth and expansion of organization together with local suppliers plus they have no intend to change their sourcing strategy in the years ahead, she noted.
In a past communication, she said that in 2020, the group has planned everlasting closure of a complete of 170 stores while around 130 openings, producing a net decrease in the quantity of stores of around 40 globally.
Talking to the FE, one of its suppliers said during the corona virus pandemic, H&M continues placing orders and did not require any deferred repayment or discounts.
"What we have heard that H&M is normally gradually closing its organization with silver categorized native RMG factories within its technique," he said on state of anonymity.
The retailer is and you will be shifting the orders to local big platinum-and gold-rated factories, he said, adding that through the pandemic his units received work orders for more than their capacity.
He, however, explained the big factories will grab a larger share of the orders withdrawn from the H&M's silver categorized units plus they might end up being shifting abroad, especially China.
Earlier on March 08, as part of its precautionary measures soon after the first 3 COVID-19 conditions were confirmed in Bangladesh, H&M reduced its Dhaka office activities.
The firm cancelled its officials' factory visit and all meetings with external visitors.
Later by the end of March, it announced its determination to have delivery of the then produced garments and things in production and purchase the orders when other buyers cancelled or perhaps suspended orders.
It also committed not to ask local suppliers for savings on existing orders.