A man examines a bed in Ikea, famous for its flat-pack, DIY furniture. Picture: REUTERS
A man examines a bed in Ikea, famous for its flat-pack, DIY furniture. Picture: REUTERS

Stockholm — Swedish furniture giant Ikea said on Wednesday that it plans to cut 7,500 jobs worldwide by 2020, mainly office jobs, as it re-organises to focus its business on e-commerce and smaller shops in city centres.

The job cuts affect almost 5% of staff at Ingka Holding, Ikea’s parent group. Ikea is its biggest brand with 367 stores in 30 countries and 160,000 employees.

The decision to cut jobs was “based on how to lead a more simple, effective and efficient” business. “We have duplicate work throughout the market,” Ingka retail manager Tolga Öncü told AFP.

Jobs will be cut across the globe but stores and distribution units will not be affected, he said.

Ikea, via Ingka, will, at the same time, recruit 11,500 people in the next two years to meet the company’s “digital capabilities” and its plans to open about 30 new stores.

The company, famous for its flatpack DIY furniture, has been opening city-centre shops in response to changing lifestyles, since fewer people own cars.

“The retail landscape is transforming at a scale and pace we’ve never seen before. As customer behaviours change rapidly, we are investing and developing our business to meet their needs in better and new ways,” Ingka CEO Jesper Brodin said in a statement on Wednesday.

In October, Ingka reported sales of €34.8bn for its 2017-2018 reporting year, up by 2% from the previous year, which it attributed to stronger online sales and store openings.

Ikea stores received 838-million visitors in 30 countries, 3% more than a year earlier. The company’s web page meanwhile, had 2.4-billion visitors, up by 10%.

The group also said its “click & collect” service, which enables consumers to order online and pick up their products in store, and “task rabbit”, which offers buyers at-home assembly help in the US and Britain, were developing well.