IKEA to sell Russia factories, lay off staff as Ukraine war drags on
IKEA has 17 stores and 15,000 employees in Russia
IKEA announced plans Wednesday to sell Russian factories and reduce its workforce as the war in Ukraine continues to escalate.
"The war in Ukraine has already had a terrible impact on so many people’s lives," Ingka Group, which operates IKEA retail locations in Russia, said in a statement Wednesday. "It is a human tragedy that is continuing to affect people and communities."
In March, the company paused its IKEA operations in Russia and Belarus, which supported Russia, as a consequence of the invasion of Ukraine at the end of February. However, at the time, the company promised to protect and continue paying all its employees through August and offering core benefits.
UKRAINE NEWS: IKEA, H&M PAUSE RUSSIA OPERATIONS
"Unfortunately, the circumstances have not improved, and the devastating war continues," the company announced Wednesday.
The company's logo is seen outside of an IKEA Group store in Saint-Herblain near Nantes, France, March 22, 2021. (Reuters/Stephane Mahe / Reuters Photos)
With businesses and supply chains heavily impacted around the world, the company also doesn't think it "possible to resume operations any time soon."
As part of its plans to further scale down operations, the company said all IKEA Retail business will remain stopped and its "workforce will be reduced, meaning that many co-workers will be affected."
GET FOX BUSINESS ON THE GO BY CLICKING HERE
All of its home furnishing inventory in Russia will be sold off, and all imports and exports of IKEA products in and out of Russia and Belarus will remain paused.
The Inter IKEA owned Industry business in Russia will also reduce the workforce and sell its four factories. The two Inter IKEA-owned purchase and logistics offices, which are located in Moscow and Minsk, will also shut down, according to the company.
The company told FOX Business that the process to scale down is already underway but declined to give more details on how many employees would be impacted.
CLICK HERE TO READ MORE ON FOX BUSINESS
The company has 17 stores, 9 planning studios and 15,000 employees in Russia. It does not have any stores or retail businesses in Belarus, the company previously told FOX Business.