Ikea slashes 10K jobs in Russia after halting operations: report
Ikea reported record-high annual sales on Thursday
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Ikea has reportedly cut 10,000 jobs in Russia as the company exits the country.
French news agency AFP, citing Ingka Group CEO Jesper Brodin, first reported that Ikea had laid off around 10,000 of its 12,000 retail employees in Russia.
Brodin said Ingka group – which owns the bulk of IKEA stores – said the holding group had not yet decided whether to sell the Russian stores.
Ingka's shopping malls are still open.
IKEA SET TO LIQUIDATE RUSSIAN UNIT AS OCCUPATION OF UKRAINE CONTINUES
Ikea announced plans in mid-June to sell Russian factories and reduce its workforce as the war in Ukraine escalated.
"Approx. 10,000 of our co-workers will have left Ingka Group by the end of October. Affected co-workers entered a mutual agreement process and were offered a compensation package that significantly exceeded the standard," Ingka Group told FOX Business in a statement on Thursday.
Traces of the dismantled IKEA signage are seen on a facade in central Saint Petersburg, Russia September 9, 2022. (REUTERS/Anton Vaganov / Reuters Photos)
Ikea, the world's largest furniture brand, said in March that it would reduce its 15,000-person workforce in Russia.
The company said it would continue to pay staff through the end of August.
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FILE PHOTO: Customers shop following the opening of an IKEA store in Nice, France, May 11, 2022. (REUTERS/Eric Gaillard/File Photo / Reuters Photos)
On Thursday, Ikea reported record-high annual sales.
Sales in stores and online grew 6.5% in the 12 months through August, amounting to 44.6 billion euros.
FILE PHOTO: The company's logo is seen at an IKEA store in Nice, France, May 11, 2022. (REUTERS/Eric Gaillard/File Photo / Reuters Photos)
Ikea said the financial year had been challenging for people everywhere, noting that inflation was a "big part of that."
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"IKEA prices remained relatively stable for several years," Inter Ikea Group CEO Jon Abrahamsson Ring said in a statement. "That gave us an advantage when competitors raised prices early in the pandemic. Unfortunately, we can’t ignore surging raw material and transport costs. Long-term, we remain committed to affordability for the many people around the world."
Reuters contributed to this report.