Report: Ikea lays off 10,000 employees in Russia, calling it a ‘challenging’ year
Ikea store in Moscow
On Thursday, the Swedish furniture giant Ikea after reporting a 6.5% increase in their full-year sales, calling it a “challenging” year lays off 10,000 employees in Russia as it makes its exit from the country, reported AFP.
Sources indicated that they shut down stores in Russia back in March following its invasion of Ukraine and said that it would sell its factories and close its offices in the country at the time. This also led to the reduction of its 15,000 people workforce in Moscow, said a different report. However, they had previously indicated that they would pay employees till the end of August.
ALSO READ:Ikea to 'scale down' Russia, Belarus operations over Ukraine war
Jesper Brodin, CEO of the holding company Ingka which oversees most of the Ikea stores in Moscow told the French news agency that they had to lay off around 10,000 of its 12,000 retail employees in Moscow. On the other hand, despite supply chain issues, shrinking customer confidence and their exit from Russia, Ikea announced record-high annual sales on October 13.
Inter Ikea, its holding company, in a statement, said, “Sales for FY22 were impacted by inflation and supply chain problems, which increased costs and raised prices. Thus, although sales have increased in dollar terms, they have not increased proportionately.” However, they added that supply chain issues made it challenging to keep the stores running.
ALSO READ:In 2022, Ikea to hike prices by 9 per cent due to supply chain woes
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The company claims that the high rate of inflation forced the furniture giant to end its policy of price stability, said media reports. Reportedly, despite setting another sales record Ikea’s growth has been attributed to the increase in the price as opposed to the volume of goods sold due to supply chain issues.
(With inputs from agencies)
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