The online fashion retailer Zalando wants to cut hundreds of jobs. This emerges from an internal letter from the two co-bosses and founders Robert Gentz and David Schneider to the workforce of the Dax Group, which is available to the F.A.Z. "This is a very tough but necessary decision to prepare for the challenges and opportunities ahead."

Maximilian Sachse

Editor in Business

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In particular, it should be about jobs in administration, also at management level. Employees in the logistics centers, customer service and stationary outlet stores are not affected. Operational positions at Zalando Studios, where, among other things, the product photos for Zalando and third parties are created, are also excluded from the job cuts. Which other areas are affected and how badly, the Executive Board itself does not yet know. However, consultations with the employee representatives should begin immediately.

Schneider and Gentz are keeping a "wide range" of options open, including potential internal transfers, training or "reorientation support." Volunteer programmes in the affected areas are also conceivable. They want to "give everything to support our colleagues during the process."

"Too much growth"

The company had already slowed the pace of new hires in recent months and only hired in a few strategically important areas. During the presentation of a new organizational structure in December 2022, it was still said that the plan was not accompanied by personnel savings. As part of the reform, teams in local markets are to be strengthened in order to adapt the product range more closely to local customers. At the same time, teams are to develop tailor-made offers for specific customer groups in a kind of double structure, for example for customers in the areas of "beauty" or "streetwear". The now announced job cuts have nothing to do with the new organizational structure, according to business circles.

"Over the past few years, some parts of our company have grown too much," Gentz and Schneider write in their letter. "We have reached a level of complexity that has affected our ability to react quickly." In fact, driven by rapid sales growth from 2020 to 2021, the number of employees rose from just under 14,200 to more than 17,000. Insiders reported that in principle, every team got what it wanted.

"Large company with the mindset of a small business"

Since this year, things have changed. In view of the immense price increases, consumers spend less money on online shopping. The tailwind from the pandemic has diminished in 2022, write the Zalando bosses. "The macroeconomic environment has become more challenging." Instead of a "large company with the structure and mindset of a large company", Zalando must be "a large company with the mindset and structure of a small company" that embodies simplicity, pragmatism and thrift.

Zalando joins a number of other technology companies with the job cuts. The Facebook group Meta announced the dismissal of 11,000 employees, at Google's parent company Alphabet there were 12,000, at Amazon 18,000 employees are affected by the cuts. In Germany, the delivery group Delivery Hero recently announced that 156 employees would have to leave the headquarters.