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28 Jun 2023

Jasim Uddin, The Business Standard

Bangladesh: Suppliers report H&M 'withdrawing' orders with small-medium factories and shifting to large factories to reduce suppliers amid global economic slowdown

"H&M’s Bangladesh sheds 46 jobs", 28 June 2023

...H&M has decided on another big job cut in its Bangladesh office as part of an effort to reduce its operational costs amid a global economic slowdown...

H&M Bangladesh office Stakeholder Engagement and Public Affairs Manager Faisal Rabbi confirmed to The Business Standard that 46 of their colleagues are impacted by the move...

"This change is part of what was communicated in our quarterly report in the autumn of 2022," he added through email communication...

Earlier in December 2020, the retailer laid off another 101 employees in this office amid the Covid-19 outbreak.

Sources mentioned the move will help foster a true partnership between buyer and supplier despite the job cut.  

H&M will no longer conduct product Quality Control (QC) Inspections and leave the process to its supplier as part of the transformation in the supply chain, they said.

Earlier, 100% of products' QC inspections were conducted by the retailer's officials...

"We continually evaluate and keep flexibility in our organisational setup to make sure we are well-equipped to adapt and respond to the world changing around us," said Faisal Rabbi regarding the company's supply chain in the coming days.

Meanwhile, local entrepreneurs said the retailer has been gradually downsizing its business, withdrawing orders from small-medium factories and shifting towards larger ones aiming to reduce the number of suppliers since the Ukraine war broke out. 

They fear that H&M may even further shorten its supplier list indicated by abolishing its QC team and reducing its merchandising team.

However, denying such possibilities, Faisal Rabbi said no such changes are part of its ongoing global transformation plans. "We have no plans to change our sourcing strategy."...