Inditex considers 25,000 temporary layoffs in Spain

Inditex considers 25,000 temporary layoffs in Spain

Inditex could temporarily lay off all 25,000 of its shop staff in Spain if the country's state of emergency continues beyond April 15, a company official said on Friday, a sign of how the economic damage of the coronavirus outbreak could worsen.

FILE PHOTO: The logo of a Zara store, an Inditex brand, is seen in central Madrid
FILE PHOTO: The logo of a Zara store, an Inditex brand, is seen in central Madrid, Spain, December 13, 2017. REUTERS/Susana Vera/File Photo

MADRID: Inditex, the owner of Zara and Massimo Dutti, may temporarily lay off all 25,000 of its store staff in Spain if the country's state of emergency extends beyond April 15, in what would be one of the largest such moves in Europe due to the coronavirus outbreak.

Employees in logistics, central services and manufacturing operations would not be affected, a company official who declined to be named said on Friday. Inditex's headquarters in Arteixo, northern Spain, are the nerve center of the fashion group's operations.

Most of the company's administration staff are working from home while logistics employees are working fewer to a shift so that safety recommendations of keeping a distance between workers can be observed, the official added.

Spain declared a nationwide 15-day state of emergency to fight the coronavirus on Saturday, ordering bars, restaurants and most shops to close, as well as restricting transport.

Inditex's stores in the country, including its flagship Zara chain, have been closed since then, although it has continued to pay their employees' salaries.

Carmarkers Seat, Volkswagen and Renault, as well as fast-food retailer Burger King, are among big companies that have already temporarily laid off thousands of workers in Spain. Airline Iberia said on Thursday it would lay off up to 90per cent of its air-bound staff as planes are grounded.

The mass temporary layoffs are not restricted to Spain. On Friday, truckmaker Volvo said it would put all its 20,000 staff in Sweden on short-term temporary discharge.

Inditex's home market has the group's largest store network by far, accounting for about a sixth of its global sales. The group said on Wednesday sales had plunged 24per cent in the first two weeks of March with nearly half its 7,500 stores shut globally.

It employs around 175,000 people, including in China, Russia and the United States.

(Reporting by Sonya Dowsett; Editing by Mark Potter, Kirsten Donovan)

Source: Reuters

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