"The cost and efficiency programme that we have initiated involves reviewing our organisation, and we are very mindful of the fact that colleagues will be affected by this. We will support our colleagues in finding the best possible solution for their next step", stated Helena Helmersson, CEO of H&M.

The company added that this programme would result in a restructuring charge of more than 800 million Swedish kronor (around 77 million US dollars) in the last quarter of the current year. However, H&M estimates to save annually around 2 billion Kronor (192.9 million US dollars) from the second half of 2023.

Like other retailers, H&M is struggling with a period of uncertain consumer demand, fuelled by surging inflation, at a time when its profit margin is coming under pressure from higher raw material and freight costs. After regaining some momentum in the first two quarters of the year, the Stockholm-based company posted a net sales decline of 4% in local currencies in the third quarter, which was attributed to the decision of exiting the Russian market. But the truth is H&M has been bouncing back more slowly than some of its rivals, namely Inditex, from the COVID-19 pandemic.