Copenhagen, Sweden : Swedish home furnishings giant Ikea says it is cutting thousands of jobs worldwide, partly as a result of a new strategy to open shops in city centres to complement its larger stores.
Ikea says the cutbacks will allow it to focus “on its e-commerce platform, to better meet the needs of its customers and be more convenient and affordable to many more people.” The company is opening stores in 30 major city centres to diversify its reach.
Ikea is cutting a record number of jobs as the flat-pack furniture seller tries to cut bureaucracy as part of a big transformation from an out-of-town retailer to one more focused on the city centre and online.
Ingka Group, Ikea’s parent company, said it would cut 7,500 jobs out of 160,000 mostly in global functions and offices in 30 countries.
Jesper Brodin, chief executive of Ingka, said: “Decisions like these are never easy and we’ll do our best to support our co-workers in a time of change. We continue to grow and perform strongly. At the same time, we recognise that the retail landscape is transforming at a scale and pace we’ve never seen before. As customer behaviours change rapidly, we are investing and developing our business to meet their needs in better and new ways. We will put greater emphasis on making our existing stores even better and taking the opportunity to renew and reinvent our business in a way that is inspired by our history, culture and values.
As part of the transformation, Ingka will create 11,500 new jobs through opening 30 new Ikea stores in city centres as well as investing in its digital and logistics operations.
Ikea is focusing on 30 megacities around the world and looking to bring its stores closer to its customers compared with its previous large warehouses among “the potato fields,” as its former chief executive described it.
Tolga Oncu, retail manager at Ingka, added: “Over the next three years, we will become even more accessible and convenient for our customers with new store formats, city locations and a better digital offer. This means we will be able to interact with customers wherever and whenever they choose, and offer our range and services in a variety of ways, at prices they can afford. To enable this, we will make changes in how we lead, work and organise ourselves, and the development of new capabilities in order to keep as much talent within the company.”