Ikea has announced that it would reorganize its global business in order to reach more urban customers through smaller, more central stores, after having noticed major changes in customer behaviour, CNN reports.
The first actions to be taken by Ingka Group, which owns and operates most of the Ikea stores, will be cutting global workforce by 5 percent (about 7,500 people) and moving towards smaller stores and more online shopping.
“We recognise that the retail landscape is transforming at a scale and pace we’ve never seen before,” CEO of Ingka Group Jesper Brodin said in a statement. “As customer behaviours change rapidly, we are investing and developing our business to meet their needs in better and newer ways.”
Most of the jobs that will be cut are in the administrative and support areas. However, Ikea also plans to create about 11,500 new jobs as it expands with new, smaller stores that will be located in cities around the world.
Ingka’s 367 Ikea stores around the world employ 160,000 people. In total, Ikea has 208,000 employees globally.
“We will put greater emphasis on making our existing stores even better and taking the opportunity to renew and reinvent our business in a way that is inspired by our history, culture and value,” Brodin said.