German online fashion retailer Zalando on Tuesday said it was cutting hundreds of jobs across its workforce of 17,000, saying it had expanded too much and citing a difficult economic environment since the coronavirus pandemic.
“We have decided to start a program that will remove several hundred overhead roles across many of our teams,” it said in a statement. “Over the last few years, some parts of our company have expanded too much and we have added a degree of complexity to our organization that impacted our ability to act fast.”
The planned job cuts were first reported in the Financial Times, which said the online retailer’s workforce would shrink by up to 5%.
Shares in the company were down 1.6% at 1046 GMT. In its last quarterly earnings report in November, Zalando said it expected full-year revenues and operating profit to reach the lower end of its target range, citing sluggish consumer sentiment and high inflation.
In Tuesday’s statement, Zalando said that while the pandemic had boosted business in 2020 and 2021, “the pandemic tailwinds have faded since 2022 and the macroeconomic environment has become more challenging.”
Telecom gear maker Ericsson plans to cut about 1,400 jobs in Sweden as part of a broader plan to reduce costs globally, the firm said on Monday.
The company had earlier announced plans to cut costs by 9 billion crowns ($880 million) by the end of 2023 as demand slows in some markets, including North America.
Further job cuts, numbering several thousands in other countries, are likely to be announced in the coming days, said two sources close to the matter.
After the pandemic boom of a few years, technology companies ended 2022 with a bleak outlook. Across the sector thousands of jobs were cut to correct the over-hiring of the Covid period, and brace for, what experts call, a period of slower growth for the sector.
The layoff wave has swept not only startups and mid-sized firms, but also big tech companies such as Amazon, Microsoft, and Google parent Alphabet, among others.
So far, 312 tech companies have laid off 97,020 employees in 2023, according to tracking site Layoffs.fyi.