Benetton is restructuring its operations in Spain. The Italian fashion chain has started negotiations with union representatives over a labor force adjustment plan (ERE) that could impact more than 160 employees and result in the closure of 31 stores across the country.

The ERE’s formal process began on December 20, with discussions set to conclude on January 15. According to the UGT union, Benetton cites economic, organisational, and productivity-related reasons for the restructuring. The plan is to dismiss 156 store workers and 13 corporate staff, for a total of 169 employees.

The company has proposed severance pay of 24 days’ salary per year worked, capped at 12 monthly payments, along with a €1,500 bonus for certain groups, including employees over 50 years old, pregnant women, and individuals with disabilities. Additionally, the company has offered relocation opportunities in 30 vacancies at stores in Madrid, Barcelona, the Balearic Islands, and Girona.

However, the UGT union has expressed “total disagreement” with Benetton’s proposal. Following a January 9 meeting, UGT shared its conclusions after reviewing Benetton’s economic report, arguing that while the company faces “serious economic issues,” wage costs are not the primary issue. The union highlighted that wages increased by 5.67% in 2022 compared to 2021, while revenues grew by 16.45%. UGT is instead demanding compensation for unfair dismissal, with 33 days’ salary per year worked and a cap of 42 months.

These workforce cuts are part of a global restructuring plan announced by Benetton last spring, aimed at addressing growing financial losses, which reached €230 million in 2023.

Founded in 1965 in north-eastern Italy by the Benetton siblings, United Colors of Benetton gained global recognition in the 1980s for its iconic soft wool sweaters and provocative advertising campaigns by photographer Oliviero Toscani, who passed away earlier this week.