IKEA to cut 7,500 jobs to focus on e-commerce, but looks to add 11,500 more

Swedish furniture giant IKEA will be slashing approximately 7,500 jobs worldwide by 2020, mainly administrative positions as it focuses on e-commerce and its smaller outlets. This will be out of the total 160,000 co-worker population, mainly focusing on global functions and offices in 30 markets. Meanwhile, IKEA, via parent company Ingka, will be recruiting approximately 11,500 people over the span of two years as the company plans to open 30 new stores and adopts "digital capabilities".

In a statement to Human Resources, a representative from IKEA Southeast Asia said that this announcement does not affect IKEA’s plans or employees in the region, noting that this is a region where “economies are growing and more and more people are joining the middle class – and improving their lives at home.”

The spokesperson said: “IKEA Southeast Asia, which is owned by Ikano, with IKEA stores in Singapore, Malaysia and Thailand, will be opening a new IKEA store in Penang in March 2019, and in the Philippines in 2020. As IKEA expands in Southeast Asia, the company will also be hiring more staff.”

Jesper Brodin, chief executive officer, Ingka Group said that the retailer will continue to grow and perform, while recognising that the retail landscape is transforming at scale and pace. He explained that as customer behaviours change rapidly, IKEA is investing and developing its business to meet consumers' needs in better and new ways.

"We will put greater emphasis on making our existing stores even better and taking the opportunity to renew and reinvent our business in a way that is inspired by our history, culture and values. Our values guide our work and build our inclusive, open and honest culture. It’s all based on a spirit of togetherness and enthusiasm and we will continue to transform with that spirit," Brodin added.

Meanwhile, in the UK and Ireland, IKEA continues to invest with a focus on greater convenience. Apart from opening new stores in England, IKEA is investing in its distribution and fulfilment network with two new customer delivery centres and a parcel unit opening in London. Creating 500 new jobs, IKEA Greenwich is also set to open next year. However, as part of this next phase of the transformation 350 jobs out the 12,100 UK and Ireland roles may be made redundant during the next two years. Marketing has reached out to IKEA for comment on the Singapore market.

This comes as IKEA looks to bolster its digital and delivery services as it tests out store formats. It has plans to open smaller outlets, called "city centre" stores. In addition, IKEA is also planning to open its biggest store in the Philippines in 2020. A 700,000 sq. ft. outlet will soon be set to open at SM Mall of Asia in Manila Bay. Last week, IKEA announced that it will open its first city-centre store in Tokyo in 2020 as part of a global approach to make IKEA more accessible.

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