Benetton, the renowned Italian fashion company, has announced the implementation of a significant workforce reduction in Spain, which will involve dismissals of 169 employees, representing around 24% of its Spanish workforce.

This decision forms part of a broader strategy aimed at addressing the company’s cumulative financial losses over recent years.

In Spain, the plan entails the closure of 31 retail locations, with five of these situated in various parts of Catalonia.

According to data provided by the Workers' General Union (UGT), the job cuts will affect 153 employees in the stores alongside an additional 13 individuals associated with the company’s central offices based in Barcelona.

Javier González, part of the Commercial Services Federation within UGT, expressed opposition to the move, stating, "We find ourselves in the initial phase of negotiations, and at this stage, we refuse to acknowledge the ERE [Expediente de Regulación de Empleo] as we believe that the economic reasons Benetton is citing are unjustified.

We demand detailed information on the business performance in Spain as global loss data is insufficient for us."

Benetton aims to close 500 stores worldwide, which accounts for approximately 14% of its total retail footprint, currently encompassing around 3,600 stores, according to the company’s website.

This global retrenchment is motivated by recent financial disclosures indicating substantial losses for the group, which recorded a loss of €230 million in 2023, substantially deeper than the €81 million loss in the previous year, as reported by Reuters.

Despite these losses, the company’s revenue remained stable at around €1 billion.

These financial challenges have led to profound internal changes, including the replacement of its Chief Executive Officer Massimo Renon in July with Claudio Sforza, tasked with steering the company through this turbulent period.

Sforza takes the helm with the intent to steer the company back towards financial health, with plans to curb losses within a year and achieve financial equilibrium by 2026.

The broader implications of Benetton's global adjustment strategy may have far-reaching effects, potentially reflecting broader trends in the fashion retail industry, particularly in the wake of the economic disruptions caused by the recent global events.

Adding a poignant chapter to Benetton’s ongoing narrative, the recent passing of Oliviero Toscani, the acclaimed Italian photographer and advertiser, marks the end of an era.

Toscani, renowned for his bold and provocative advertising campaigns for Benetton, left an indelible legacy on the company and the marketing industry at large.

His influential work earned him numerous accolades, including four Golden Lions and the UNESCO Grand Prix.

Benetton’s significant strategic shift underscores the challenging conditions facing retail businesses globally, as they navigate evolving consumer preferences and unprecedented economic pressures.