IKEA RESORTS TO CUTTING 7,500 ADMINISTRATIVE JOBS

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IKEA
IKEA

STOCKHOLM: Over the next couple of years, Ikea plans to cut around 7,500 administrative jobs mainly in central support functions. However, the group also estimates creation of around 11,500 new jobs with its 367 Ikea stores.

The jobs come in response to company’s plan of expanding new store formats in online and investments in digital capabilities. Ikea now plans to boost its digital, delivery and other sectors. It is undergoing a major transformation in all sectors. The expected redundancies affect about five percent of the company’s total workforce.

Jasper Brodin, Chief Executive, said, “We need to simplify the way we are organized. Over the last years we have invested in resources in many different ways. And, to be honest, now we see that in several parts of our organization we have a bit of duplicate work”. The redundancy is mainly aimed in central functions and global service office. However, the move will not affect store operation or distribution units.

Ikea group holds major furniture stores across the globe. The redundancy is strategy by Ikea to reinvent itself. The new strategy of the company is brick and mortar type sales.
However, the company’s new recruiting will add a net gain to global workforce of over 4,000 positions. Ikea is also following the footsteps of other retailers who have embraced the “retail apocalypse” concept.

The company plans to open its biggest ever store in Manila, Philippines by 2020. The store sprawls in an impressive area of 700,000 square feet.