Ingka currently owns 367 Ikea stores and employs 160,000 people of Ikea's 208,000 global workforce.
The company will be opening 30 new stores in major cities, with a focus on delivery instead of self-service to support the digital business.
While the job eliminations may come as a surprise given that the company made over $14 billion last year in profits, the rest of Ikea’s strategy does not.
The reorganization could lead to the creation of 11,500 new jobs as it expands into 30 new smaller-format stores in cities around the world, Ikea said.
As part of global restructuring efforts, Ingka Group (Ingka Holding B.V and its controlled entities) is accelerating its transformation, stepping up investments in new and existing IKEA stores and fulfilment centres, developing city centre formats and focusing on its e-commerce platform, to better meet the needs of its customers and be more convenient and affordable to many more people, the statement said.
While the company is the largest furniture retailer in the world, and it’s privately owned–which means it’s immune to the whims of Wall Street–it has experienced two years of slow growth in brick-and-mortar stores.
Ikea, the world’s largest furniture retailer, has said it will cut 7,500 jobs over the next two years in its largest ever restructuring.
The company intends to reach 200 million Indians in the coming three years through different channels as it looks at India as a new and expanding retail market for Ingka Group, the parent firm of IKEA.
Besides jobs in the stores and new city centres, it will also create a lot of new roles in areas such as digital, data analytics, diversified fulfilment networks and personalisation.
Swedish furniture major IKEA on Wednesday said its employee count in India may see a ten-fold rise to 15,000 in future, whereas the company may look at trimming around 7,500 jobs globally as part of restructuring.
(CNN) - Ikea is reorganizing its global business to reach more urban customers and people who don't want to shop in its massive warehouses.
Ingka Group, which owns and operates most Ikea stores, said Wednesday it is cutting its global workforce by 5% and shifting toward smaller stores and more online shopping.
Ikea’s leader of digital transformation, Michael Valdsgaard, shared a lot of the company’s thinking with Fast Company earlier this year, saying, “The business model of Ikea having a blue box in a cornfield, and you jump in the car with your family and have an ice cream [at the store], is not the only thing we should offer our customer.
"In the coming two years, 11,500 new jobs will be created globally, through opening around 30 new IKEA touchpoints, investments in its fulfilment network and in digital capabilities.