Ikea plans 7,500 worldwide job cuts in e-commerce push

Customers shop for furniture at an Ikea in Beijing, China.
Customers shop for furniture at an Ikea in Beijing, China.PHOTO: NYTIMES

STOCKHOLM (AFP) - Swedish furniture giant Ikea said on Wednesday (Nov 21) it plans to cut 7,500 jobs worldwide by 2020, mainly office jobs, as it reorganises to focus its business on e-commerce and smaller shops in city centres.

The job cuts affect almost 5 per cent of staff at Ingka Holding, Ikea's parent group. Ikea is its biggest brand with 367 stores in 30 countries and 160,000 employees.

The decision to cut jobs was "based on how to lead a more simple, effective and efficient" business.

"We have duplicate work throughout the market," Ingka retail manager Tolga Oncu told AFP.

Jobs will be cut across the globe but stores and distribution units will not be affected, he said.

Ikea, via Ingka, will at the same time recruit 11,500 people in the next two years to meet the company's "digital capabilities" and its plans to open around 30 new stores.

The company, famous for its flatpack DIY furniture, has been opening city centre shops in response to changing lifestyles, since fewer people own cars.

"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 on Wednesday.

In October, Ingka reported sales of €34.8 billion (S$54 billion) for its 2017-2018 reporting year, up by 2 per cent from the previous year, which it attributed to stronger online sales and store openings.

Ikea stores welcomed 838 million visitors in 30 countries, 3 per cent more than a year earlier.

The company's web page meanwhile had 2.4 billion visitors, up by 10 per cent.

The group also said its "Click & Collect" service, which enables consumers to order online and pick up their products in store, and "TaskRabbit", which offers buyers at-home assembly help in the US and Britain, were developing well.