Daily Management Review

Ikea’s Parent Company To Create 11500 Jobs But Cut 7500 Globally


Ikea’s Parent Company To Create 11500 Jobs But Cut 7500 Globally
While on one hand there can be creation of 11,500 new jobs globally in the next two years, there can also be loss of about 7500 jobs worldwide at the Swedish furniture retailer IKEA. This announcement was made by the Ingka Group, the parent company of Ikea. The addition of jobs would be because of the strategy of expansion of the company especially in the emerging markets and as the company invests more on development of its online sale channel and fulfilment centers.
The company also announced that out of the 160,000 employees spread across 30 markets, there would also be reduction of 7500 jobs and the loss would be primarily related to its global operations. Therefore, according to rough calculation, the effective increase in job roles would be about 4,000.
The company is in an expansion mode and addition of jobs in the emerging market of India after it started its first store in the 1.25 billion market, in the Southern city of Hyderabad this August. The company is also set to launch its second retail store in the financial capital of India – Mumbai, next summer and its online sale channel in the market in about the same time. In the Southern Indian states of Telangana, Maharashtra and Karnataka and in the Indian capital city of Delhi, Ikea also has set up four land parcels. The company is also seeking to expand its operations into other larger cities in India.
“The idea (behind the global transformation) is how we can meet customers additionally apart from our big box stores, how we can meet them more closer in the cities under new (offline) formats that are being developed, and also to meet them digitally. This fits fantastically in India where we see that the smartphone plays a very important role, it’s a digitized country,” said Peter Betzel, chief executive officer of IKEA India.
In India, the company has announced plans of increasing the number of employees to about 15000 from the current number of 1,500 and 50 per cent of the workforce would be women. This would be dome in the long term but in the near future, Ikea plans to increase its workforce in the Indian market by 3000 in the next two years.  
But there would be some role change in the Indian market too. However, all those employees affected by the change of roles would be given the opportunity to seek new opportunities. There would be creation of a number of new roles in the areas such as digital, data analytics, diversified fulfilment networks and personalisation in addition to the jobs that would expected to be created at the IKEA stores and new city centres.
“India is an expanding market. We will create many more jobs in many new areas. We will now have to have competence working in our smaller city store formats, and competence in e-commerce, for instance, and then inside the organization a few jobs will transform. So there will be people who are today working in one job and tomorrow will wake on another job. That is also part of the transformation,” said Anna-Carin Mansson, country people and culture manager at IKEA India.
Jesper Brodin, CEO of Ingka Group, said that the company is on a strong growth path but also warned about the fast pace of change that the retail landscape which is unprecedented. The company is investing to develop strategies and measures tactics to meet the changing customer behaviours.