Ikea has announced on Wednesday (Nov 21) that it plans to slash thousands of jobs by 2020 as part of the efforts to focus its business on e-commerce and smaller shops in city centres.
About 7,500 employees, mainly those in office jobs, will be affected by the global layoffs. The job cuts affect almost 5 percent of staff at Ingka Holding, Ikea’s parent group. Ikea is its biggest brand with 367 stores in 30 countries and 160,000 employees.
In a statement, Ingka retail manager Tolga Oncu said that the decision to slash jobs was aimed to lead a simpler, more effective, and efficient business. “We have duplicate work throughout the market,” he said. Jobs will be cut across the globe but stores and distribution units will not be affected, he added.
In the next two years, Ikea via Ingka will recruit 11,500 people to meet the company’s “digital capabilities” and plan to open around 30 new stores worldwide. The company, famous for its flatpack DIY furniture, has been opening city centre shops in response to changing lifestyles, since fewer people own cars, Straits Times reports.
“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,” Ingka chief executive Jesper Brodin said in a statement.