Ikea flat-packs 5,000 staff
IKEA, the world’s biggest furniture retailer, yesterday revealed it axed 5,000 jobs last year during “the worst recession in living memory.”
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.
Ikea chief executive Anders Dahlvig, due to step down in September, said: “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.”
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.
Dahlvig, due to step down in September, has said that he expects total sales to be a record €21.5bn (£18.4bn) for the year to August, just 1.5 per cent higher than last year, despite opening 14 new stores during the period.
This represents a like-for-like sales decline — previously unheard of at Ikea. Last year, total sales growth was 7 per cent and the year before it was 14 per cent.
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 “low-cost profile”, but was being hit by the consumers slashing their spending.
Dahlvig also said the group was calling a temporary halt to expansion efforts in Russia, where it has invested $4bn (£2.4bn) in new stores, due to bureaucratic obstacles.