Retail giant H&M to cut 150 jobs as part of operational shift

H&M, the global fashion retailer, has announced the closure of its call centre in Edinburgh, leading to an anticipated 150 job losses by the end of the year. The decision, which has left many employees and their families facing an uncertain future, is attributed to changing customer behaviours, heightened market competition, and rising operational costs.

Located in Waverley Gate, the Edinburgh call centre served as a hub for customer service operations. In August, employees were informed of a proposal to shut down the site, initially prompted by the expiration of the building’s lease in 2025. 

H&M cited the need to reevaluate its operations in response to the shifting retail landscape, in which online shopping and new competitors have reshaped the industry. This transformation, accelerated by the pandemic, has already led the retailer to close over 250 stores globally in recent years as more customers gravitated towards digital shopping channels.

The process leading up to the closure included a consultation period that spanned from September to November. Although the initial announcement was met with disappointment and surprise among staff, H&M worked to mitigate the impact by offering alternative positions where possible. 

Some employees accepted new roles or opted for other employment, while others chose to leave voluntarily, resulting in a slight reduction in the total number of job losses. However, those who are ultimately affected by the closure were given two weeks' notice of their termination, with additional pay in lieu for employees entitled to a longer notice period. Reports indicate that the announcement meeting lasted a mere five minutes, leaving many in shock over the abruptness of the news.

Deputy First Minister Kate Forbes had previously appealed to H&M’s management to reconsider the job cuts, emphasizing the impact on the Edinburgh workforce and urging the company to explore options that might prevent redundancies. Despite these efforts, the closure will go ahead, with operations winding down by December 14, 2024, and the building itself expected to close permanently by March 2025.

In a statement, an H&M spokesperson acknowledged the difficulty of the decision, explaining, “We constantly evaluate how we operate to ensure that we deliver on our goals and contribute to the overall success of the company. Having looked into the scope of our customer service set-up, increased competition in the market, our customers changing behaviours and expectations, and operational costs, we have made the difficult decision to proceed with the proposed closure of our customer service site in Edinburgh by the end of the year.”

The Scottish government has stepped in to support affected employees through its Partnership Action for Continuing Employment (PACE) service, which provides assistance to workers facing redundancy. A Scottish government spokesperson described the situation as “a concerning time for employees and their families,” and expressed commitment to helping ease the transition for impacted workers.

The closure marks another step in H&M’s adaptation to the evolving retail environment, where digital demand is increasing as physical store operations shrink. However, it leaves a lasting impact on Edinburgh’s local workforce, highlighting the challenges traditional retail giants face as they adjust to a rapidly changing market.