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Employees Accuse Inditex of ‘Disguised Layoffs’ as It Shutters Stores

Inditex employees in Spain say the world’s largest fashion retailer is leaving them high and dry as it prepares to permanently shutter 1,200 stores globally—despite a previous commitment to safeguard jobs.

Last June, the Zara owner, which also operates the Bershka, Pull & Bear and Massimo Dutti brands, announced it would “absorb” smaller and older outlets from brands while expanding some of its flagship stores. The Spanish closures are the first of up to 700 expected casualties in Europe, 100 in the Americas and 400 elsewhere in the world this year. Despite the changes, Inditex’s headcount would “remain stable” and employees of absorbed stores would be offered roles in other jobs such as dispatching online orders, it said.

Under a December agreement with two Spanish unions, obtained by Reuters this month, Inditex had agreed to provide all affected staff with new positions matching their old contracts and positions within 25 kilometers (16 miles) of their old jobs. An internal report by Unión General de Trabajadores (UGT), the second-biggest Spanish union within Inditex, seen by Reuters, noted, however, that 40 percent of the new positions were outside the province where the worker was previously employed. In some cases, workers were transferred to the other side of Spain. Hours, too, were slashed.

As a result, one in four transferred workers has resigned so far, the report said.

“If workers who used to work 40 hours are offered 12-hour jobs, hours away, that’s not preserving employment,” Cristina Estevez, UGT’s retail representative, told Reuters.

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An Inditex spokesperson countered the union’s claims by saying it was complying with the agreement and that the relocations respected “all its principles, wording and spirit, which is to prioritize the maintenance of jobs.” The spokesperson added that the company was offering more than one vacancy per job lost, and that 75 percent of workers have successfully relocated to date.

But Spanish unions contacted by Reuters said they weren’t expecting the high number of offers in different regions. Workers also saw their weekly hours cut from between 30 to 40 to fewer than 20 and their shifts moved to evenings and weekends.

“They’re basically inviting us to leave,” one Zara worker in Guadalajara near the capital of Madrid told Reuters. “The vacancies they offered in our store were eight or 16 hours weekly, always on weekends, or even just Sundays, when almost all the staff used to do 20, 40 hours weekly. They’re laughing at us.”

Anibal Maestro, secretary for Confederación General del Trabajo, another union, called Inditex’s actions “disguised layoffs” that are tantamount to “forcing the workers to quit.”

The Inditex spokesman said, however, that it offered workers the best alternatives available in the vicinity and that some employees had in fact asked to be relocated further away. Under the December agreement, Inditex had agreed to cover transport costs up to 90 euros ($108.6) a month when relocation within bounds was not possible. It had also committed to paying for relocation expenses if employees had to move house.

Still, workers have doubts if Inditex is acting in their best interests.

“That agreement was a blank check for the firm,” Zara worker Jose Angel Parejo, whose store in central Madrid closes this month, told Reuters. “They committed to an equivalence in [the] quantity of vacancies, but not quality.”

Inditex earned 14.1 billion euros ($17 billion) in the first nine months of fiscal year 2020, a 29 percent decrease from the 19.8 billion euros ($23.9 billion) it made in the same period the year before.