Inditex Keeps Paying 25,000 Employees of Closed Shops For Now
Inditex Considers Plans to Lay Off 25,000 in Spain Next Month
(Bloomberg) --
Inditex SA, owner of the Zara apparel brand, is considering temporarily laying off as many as 25,000 employees of its stores in Spain in mid-April if the country’s state of emergency extends beyond that time.
The company has closed shops in Spain and will keep paying workers their normal salary through April 15. Then it may impose a temporary redundancy plan if the stores need to remain closed, according to a company official. For those who may be temporarily laid off, the retailer will pay the difference between their unemployment benefits and their usual salary, according to the official.
Inditex said earlier in the week that half its shops worldwide are closed due to the novel coronavirus pandemic. Sales fell 24% in the first part of this month in local currencies. The company’s stock rose as much as 6.5% Friday, having lost about a third of its value this year.
Temporary redundancies are a scheme by which Spain allows companies to fire workers during times of financial duress with the aim of rehiring when the situation improves. The government pays workers unemployment benefits, and the plans have to be discussed with unions and revised by the labor ministry.
Hundreds of companies have been filing temporary redundancy plans in Spain since the government announced a state of emergency March 13.
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