Ikea flat-packs 5,000 staff

IKEA, the world&rsquo;s biggest furniture retailer, yesterday revealed it axed 5,000 jobs last year during &ldquo;the worst recession in living memory.&rdquo;<br /><br />The Scandinavian family-ownedfurniture giant employs 120,000 people worldwide, with around 9,500 jobs in the UK, but declined to say how many have been cut at its British operations over the past year.<br /><br />Ikea chief executive Anders Dahlvig, due to step down in September, said: &ldquo;We have never had to implement such massive job cuts before. But it is completely necessary to adapt our costs and our capacity to demand, which is weaker than we expected.&rdquo;<br /><br />The group said it scaled back its sales outlook due to the economic downturn but still expects to post record sales for its current fiscal year.<br /><br />Dahlvig, due to step down in September, has said that he expects total sales to be a record &euro;21.5bn (&pound;18.4bn) for the year to August, just 1.5 per cent higher than last year, despite opening 14 new stores during the period.<br /><br />This represents a like-for-like sales decline &mdash; previously unheard of at Ikea. Last year, total sales growth was 7 per cent and the year before it was 14 per cent.<br /><br />The group, known the world over for low-price, self-assembly furniture and minimalist Scandinavian style, has said it had been surprised by the severity of the downturn. It added that it continued to steal market share due to its &ldquo;low-cost profile&rdquo;, but was being hit by the consumers slashing their spending.<br /><br />Dahlvig also said the group was calling a temporary halt to expansion efforts in Russia, where it has invested $4bn (&pound;2.4bn) in new stores, due to bureaucratic obstacles.