Cuts in operating expenses to dilute costs, weaker sales—which made store closures and layoffs more urgent—heavier debt service due to high interest rates, and business reorganizations tied to mergers all led to job reductions.

Demand for labor in parts of the retail sector, given today’s high turnover, may help absorb some of these workers.

One particular issue has drawn attention from the companies consulted: rising cost inflation, even as consumer spending shows signs of cooling. “We are dealing with wage inflation from collective bargaining agreements, energy costs are rising again, and the sales curve is heading downward or, at best, flat. There is not much room to maneuver,” said the CEO of a home improvement chain that has already closed stores this year.

Economists note that groups already in a fragile situation—burdened with years of high leverage or lacking competitiveness—have been hit harder than others that took measures to improve efficiency.

“We have become a country addicted to high interest rates to finance a deficit-ridden State, and companies are the ones paying the bill,” said Fabio Bentes, chief economist at CNC, the national retail and services confederation.

Valor compiled the cases based on an analysis of 2025 quarterly earnings reports, filings with the Securities and Exchange Commission of Brazil (CVM), official announcements of closures, and company sources.

Broadly, starting in the second quarter, a wave of cuts extended into the second half of the year in certain segments and companies, both listed and privately held.

From April to June, RD Saúde (Raia Drogasil), Casas Bahia, and Westwing reduced staff. In recent months, after July, GPA (owner of Pão de Açúcar supermarkets), Telhanorte, Azzas 2154, and Grupo Multi also announced cuts, according to official statements and Valor’s reporting.

Fast Shop, which is under investigation by São Paulo prosecutors for corruption, also cut jobs and plans further reductions.

In the view of Luiz Guanais, retail analyst at BTG Pactual, other similar moves remain possible but are likely to be more targeted among large groups. “I believe chains are adapting to a ‘new normal,’ with more indebted customers and inflation stabilizing at a high level. That said, today retailers are better prepared to deal with a slowdown and 15% annual interest rates than they were three or four years ago.”

Specialists emphasize that decisions on workforce reviews vary, and even well-structured, low-leverage businesses have faced pressures. That was the case with RD, which cut costs after a weak start to the year in its more mature stores. According to sources, the company dismissed about 700 people in April, including coordinators and managers with up to 47 years at the company.

Its last filing with the stock exchange B3 showed 64,200 employees at the end of 2024. The retailer declined to comment. A person close to the chain noted that it still projects 350 store openings this year, with new hires.

In its earnings release, the company said it carried out a corporate restructuring in April to reduce overhead and administrative expenses, part of “cost containment efforts” launched in 2024. In total, RD spent R$50 million on the reorganization, which eliminated overlapping roles and expanded autonomy. After that, the chain temporarily stopped hiring in the first half of the year, according to a former company coordinator.

In consumer durables, Westwing shut down two logistics warehouses—in Rio de Janeiro in June and Belo Horizonte in April—while keeping the one in Brasília. Its three stores and distribution center in Jundiaí (São Paulo) remain open. Sources said 60 to 70 people were laid off. At the end of 2024, the company had 405 employees.

“The idea was to make the company leaner, especially as online demand was losing steam this year,” said a furniture supplier to the chain. In its earnings release, the retailer said it carried out an “additional adjustment in its cost structure” in a context of declining gross merchandise volume (GMV) and market performance, “in line with the strategy of improving profitability.”

In a statement, Westwing said the reduction in “hubs” helped improve operating performance. The company said it aims to seize opportunities from a potential economic recovery, with a focus on profitability.

In recent weeks, GPA informed the CVM it had cut around 730 jobs in just over two and a half months—between July 1 and September 16, days before its September 18 disclosure. The company did not say whether further cuts are planned or which areas were affected. GPA declined to comment beyond its filing. The company had 39,000 employees in December 2024.

In the document, GPA said it has been “making efforts to reduce leverage,” and for this reason, it has a headcount reduction program underway. Its financial leverage—measured by the ratio of net debt to EBITDA—reached 3.0x in June 2025, up from 2.7x a year earlier.

Telhanorte and Tumelero, Brazil’s second-largest home improvement group, have been hit directly by higher and scarcer credit lines this year. The group has reduced its workforce by 40% to 45% since the end of 2024, according to a source. It had 2,700 employees in December.

At Telhanorte, the drop was around 25%, Valor has learned. Recent staff cuts followed business plan revisions that culminated in Tumelero shutting down 11 stores last month.

Additionally, as announced on Wednesday (2), all 16 Tumelero units were sold to Grupo GG10, which sells tires and machinery, as part of an effort to streamline operations. A major operational restructuring has been underway since 2024, led by general manager Manuel Corrêa, who has focused on the process.

Since its sales boom during the pandemic, the sector has struggled to regain momentum. The sharp rise in interest rates in 2021, which raised the cost of capital, and again in 2024, along with heavy competition, unsuccessful strategies, and product inflation, have all eroded competitiveness.

Under current plans, Tumelero ceased operations at 11 loss-making stores in Rio Grande do Sul in September, including two in Porto Alegre, the company confirmed in a statement. In July, it closed large-format stores in Aricanduva and Osasco, both in greater São Paulo. Valor learned that Atacadão is expected to take over the first location.

Telhanorte currently has 27 stores nationwide, down from nearly 70 in 2023.

At the end of 2024, competitor Casa&Construção (C&C), hit harder by the tough economic environment, shut down in Brazil and dismissed the remaining staff in its stores, such as one on Marginal Tietê in São Paulo, Valor found. The chain was sold in 2023 by the Faria family, the owners of Grupo Alfa, to AGI Partners. The asset manager wound down operations a year later. AGI declined to comment.

In the same segment, Sodimac reduced its workforce in Brazil from 2,900 to 2,500. Parent company Falabella did not comment.

Also this week, Azzas 2154—formed by fashion brands Soma and Arezzo—announced the closure of Arezzo’s women’s shoe factory in Parobé (Rio Grande do Sul) and the dismissal of 135 workers, tied to business integration.