Inditex considers 25,000 temporary layoffs in Spain

MADRID (Reuters) - Inditex, the owner of fashion chain Zara, 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.

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

Employees in logistics, central services and manufacturing would not be affected, a company official who declined to be named said on Friday. Inditex’s headquarters in northern Spain are the nerve center of the retailer’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 VOWG_p.DE and Renault RENA.PA, 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 90% of its air-bound staff as planes are grounded.

Department store El Corte Ingles, one of Spain’s biggest employers with around 90,000 workers, has deployed staff from shuttered fashion and homeware departments into working in the supermarket division, a spokeswoman told Reuters on Friday.

Demand for the supermarket’s click-and-collect service had increased by a factor of five, she said.

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

Inditex's ITX.MC 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 24% in the first two weeks of March with nearly half its 7,500 stores shut globally.

It employs around 175,000 people worldwide.

Reporting by Sonya Dowsett; Editing by Mark Potter, Kirsten Donovan and Louise Heavens