- Falabella has laid off more than 4,000 employees in all the countries in which it is present, except India and the United States, with most of the layoffs taking place in Chile and Peru.
- The layoffs are part of the company’s strategy to reduce costs by 5% and also to offset million-dollar losses.
- In addition, Falabella’s strategy includes reducing the number of department stores by 5-10% over the next five years.
Massive layoffs are not just affecting the technology sector. The retail market segment is also having trouble sustaining its revenues and profits in a scenario that is seen as recessive in the coming months.
In this context, the large Latin American retail companies also have complications and one of the paths they have adopted, like the technological giants, is layoffs.
According to what the Chilean newspaper La Tercera publishes, Falabella has fired at least 4,000 employees in all the countries in which it is present, except India and the United States.
The largest number of mass layoffs occurred in Chile and Peru, the largest by volume of company business.
The 4,000 layoffs occurred in the first three months of 2023, according to a publication BioBioChile quoting the Third.
According to the data released this Wednesday, May 10, between January and March 2023, the Chile-based company went from having 91,280 employees to 86,980, that is, almost 4,300 fewer workers.
Thus, there are 7,536 fewer people working in its stores, including the Falabella bank and the Tottus and Sodimac stores, among others.
According to The Third, in Chile, the latest layoffs amount to 1,750, while in Peru there were another 2,170.
To these must be added 215 people dismissed in Colombia; 25 in Argentina (where Falabella is in the process of withdrawing, but Sodimac continues); 100, in Brazil; 30, in Uruguay; 20 in China, and at least 6 fewer in Mexico.
All this aims to reduce the cost of salaries in the company’s total expenses by 5 percent.
Layoffs and store closures: Falabella
Why does Falabella want to save? Because in the first quarter of the year the Chilean company recorded million-dollar losses while its annual revenue fell by 6.29 percent.
According to the company, the most affected sectors were those linked to “Home Improvement” and “Department Stores”.
The company had earlier said that the massive layoffs were going to focus on intermediate positions, where there was “duplication of functions”. And that would affect “all of the holding’s business units, in all countries.”
In parallel, Falabella’s strategy is to reduce the number of department stores by between 5 and 10 percent in the next five years.
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