- Redundancies likely to affect 800 office-based roles at group level
- Ingka CEO emphasises need for speed, less complexity
- IKEA Sweden unit also to cut roles, following IKEA Norway reorganisation
- IKEA trials new stores with faster-to-open format
STOCKHOLM, March 19 (Reuters) - The owner of most IKEA outlets worldwide said on Thursday it would cut some of its office-based workforce, with 800 roles likely affected, in an effort to streamline the organisation.
Ingka CEO Juvencio Maeztu, who took the helm in November, said a slimmer organisation at the top would enable faster decision-making, with more "responsibility to the front line".
It would also lower Ingka's costs, helping the retailer to grow and to bring prices down for customers, he said.
IKEA sales have fallen for the past two years, which the retailer has attributed to its focus on cutting prices to try to increase market share and lift sales volume.
"The world we live in, both in the world and in the retail industry, requires more speed and more agility than ever before. So we need to reduce the complexity," Maeztu said.
"We are giving more focus to the front line. And by doing that, you can really take the right decisions and faster decisions."
Ingka said the cuts would impact office-based jobs across the group, mainly in Sweden and at the headquarters in the Netherlands, but did not specify what exact roles would be removed.
IKEA joins other retailers in cutting jobs this year as weak economic growth dents consumer spending. Nike cut 775 jobs in the U.S. while Home Depot in January announced 800 job cuts.
NEED TO BE AGILE
Ingka employs around 166,000 people across the world. It is split into three business areas, IKEA Retail, shopping malls business Ingka Centres, and investment arm Ingka Investments.
Asked about current geopolitical turmoil and the rise in oil prices, Maeztu said they did not affect Ingka in the short term, but they were a "reminder" of why IKEA needs to be "agile to overcome disruption".
IKEA Sweden - Ingka's retail arm in Sweden - separately said on Wednesday it was also cutting jobs, which could impact 145 additional roles. In February, IKEA Norway said it would cut 50-60 roles in its head office.
IKEA, best known for blue out-of-town warehouse stores, is shifting focus to more city and suburban stores and Ingka said it plans 20 such openings by September.
Reporting by Greta Rosen Fondahn, additional reporting by Helen Reid. Editing by Mark Potter
Source: Reuters