TLDR
- Inter IKEA is cutting 850 jobs, about 3% of its 27,500-strong workforce, as consumer demand weakens
- Ingka Group, IKEA’s largest franchisee, is also cutting around 800 office jobs
- The Iran war has accelerated a decline in consumer confidence, pushing up fuel prices and squeezing household budgets
- IKEA is shifting strategy away from large out-of-town stores toward smaller city-centre locations
- Both Inter IKEA and Ingka Group replaced their CEOs late last year after two straight years of falling sales
Inter IKEA, the company that franchises the Swedish home furnishings brand in 63 countries, is cutting 850 jobs as part of a cost-reduction drive.
The cuts represent around 3% of Inter IKEA’s total workforce of 27,500 people. Around 300 of those roles will go in Sweden, where the company runs a major hub in Almhult, the town where IKEA was founded in 1943.
Inter IKEA manages the sourcing of IKEA products from factories around the world and supplies 13 franchisees that operate IKEA stores globally.
The company has been under pressure from rising costs and US tariffs. Chief Financial Officer Henrik Elm said the business needs to move faster and simplify its decision-making.
“We need to become faster, shorten the decision-making processes, and simply concentrate our efforts on these priorities,” Elm told Reuters.
Ingka Group Also Cutting Jobs
Ingka Group, which owns the majority of IKEA stores worldwide and is the brand’s biggest franchisee, is also reducing headcount. The company announced plans in March to cut around 800 office-based roles.
Together, the two cuts add up to around 1,650 jobs across the wider IKEA operation.
Both Inter IKEA and Ingka replaced their chief executives late last year. The leadership changes came after IKEA reported its second consecutive year of declining sales.
Consumer Confidence Hit by Iran War
Elm said that consumer confidence had been falling for some time, but that the Iran war had made things worse.
The conflict has pushed fuel prices sharply higher, which has eaten into household budgets and made people less willing to spend on non-essential items like furniture or home renovation.
“In times when consumer confidence is very much affected, the disposable incomes are really going down for many, especially the consumers we want to reach,” Elm said.
He added that lowering prices had become more important than ever, but that would be impossible without bringing down costs first.
IKEA is also changing how it operates its stores. The company is moving away from large out-of-town warehouse-style locations and opening smaller stores in city centres, aiming to bring the brand closer to where more people live.
The job cuts are part of a wider push to streamline operations and fund that transition.
IKEA has faced a difficult environment of slowing consumer demand, higher operating costs, and the effect of US tariffs on its global supply chain.
The 850 Inter IKEA cuts, combined with the 800 Ingka Group reductions, signal that the broader IKEA organisation is undertaking a wide-ranging restructure as it tries to return to sales growth.
🚨 Our MAY Stock Picks Are Live!
A new month means new opportunities. Our analysts have just released their top stock picks for May, highlighting companies with strong momentum that rank highly on our KO Score algorithm. We’re also now sharing trade ideas for both long-term and short-term investors, giving you more ways to spot potential opportunities in the market.
Sign up to Knockout Stocks today and get 50% off to unlock the full list and see which stocks made the cut.
Use coupon code Special50 for your exclusive discount!
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
