The Swedish clothing giant has decided to stop operating in Myanmar following a rise in labor abuse allegations at garment factories.

According to the world’s second largest fashion retailer, “we have been closely monitoring the latest developments in Myanmar, and we see increased challenges in operating according to our standards.”

In a statement, a spokesperson for the company said that the company has decided to gradually phase out its operations in Myanmar.

Tens of thousands of workers in Myanmar could be affected by the Swedish clothing retailer’s decision. Myanmar was rocked by a military coup in February 2021.

Approximately 42,000 workers worked in 41 factories that H&M sources from in the country, according to company figures. It says it doesn’t directly own any factories, instead outsourcing production to independent vendors.

A workers’ advocacy group, Business and Human Rights Resource Centre (BHRRC), published new allegations that prompted the company to withdraw.

Since years, the organization has tracked cases of alleged labor and human rights abuses against garment workers in the country. According to the report, at least 108,000 workers have been affected by 212 alleged cases between February 2021 and February 2023.

Among the companies affected are Zara owner Inditex, Marks & Spencer, Primark, and H&M, as well as 124 factories producing for at least 47 named global fashion brands.

Recently, all the companies have issued statements regarding Myanmar, stating they are working to leave the country.

More than half of the reported cases were related to wage reductions and wage thefts, according to the BHRRC. Fourty-two percent of cases were associated with forced and “often unpaid” overtime.

A report by the nonprofit states that “gender-based violence and harassment, including verbal, psychological, and physical abuse, as well as pregnancy discrimination, is widespread.”