IKEA Cuts 5,000 Jobs Worldwide, Considers More
Written by Kymm on July 8th, 2009Unprecedented job cuts at Ikea due to crisis
Ikea Weighs More Job Cuts as Sales Growth Slows
Over the past ten months, IKEA have slashed 5,000 jobs worldwide, mainly in manufacturing and logistics.
“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,” managing director Anders Dahlvig said two weeks ago.
He said IKEA was caught off guard by the severity of the economic crisis.
“The sharp downturn of the economy has really surprised us. This downturn is very closely linked to the housing sector and is therefore even worse for our industry. Home decorating has plunged much more than the retail sector in general,” he said.
And yesterday comes this, “There might be layoffs, since we have to adjust the organization to the dampened sales growth,” said spokeswoman Charlotte Lindgren, adding that the company doesn’t yet know how many jobs would be affected.
The economic slowdown has helped IKEA boost its market share as its low-price products have won out over those of more expensive competitors. Nonetheless, its sales are about eight billion Swedish kronor, or $1 billion, below budget for 2009, Ms. Lindgren said.
Although IKEA plans to cut new store growth in half, 14 new stores are due to open this year, an investment worth some 12 billion kronor ($1.5 billion), Dahlvig said.
And new staff will be needed for those stores, so IKEA expects its number of employees worldwide to remain at around 130,000 despite the cutbacks.
