IKEA Is Cutting 1,650 Jobs — Here’s What’s Behind the Shakeup

TLDR

• Inter IKEA is cutting 850 jobs, about 3% of its 27,500-strong workforce, as consumer demand weakens
• Ingka Group, IKEA’s largest franchisee, is also cutting around 800 office jobs
• The Iran war has accelerated a decline in consumer confidence, pushing up fuel prices and squeezing household budgets
• IKEA is shifting strategy away from large out-of-town stores toward smaller city-centre locations
• Both Inter IKEA and Ingka Group replaced their CEOs late last year after two straight years of falling sales

Inter IKEA, the company that franchises the Swedish home furnishings brand in 63 countries, is cutting 850 jobs as part of a cost-reduction drive.

The cuts represent around 3% of Inter IKEA’s total workforce of 27,500 people. Around 300 of those roles will go in Sweden, where the company runs a major hub in Almhult, the town where IKEA was founded in 1943.

Inter IKEA manages the sourcing of IKEA products from factories around the world and supplies 13 franchisees that operate IKEA stores globally.

The company has been under pressure from rising costs and US tariffs. Chief Financial Officer Henrik Elm said the business needs to move faster and simplify its decision-making.

Ingka Group Also Cutting Jobs

Ingka Group, which owns the majority of IKEA stores worldwide and is the brand’s biggest franchisee, is also reducing headcount. The company announced plans in March to cut around 800 office-based roles.

Together, the two cuts add up to around 1,650 jobs across the wider IKEA operation.

Both Inter IKEA and Ingka replaced their chief executives late last year. The leadership changes came after IKEA reported its second consecutive year of declining sales.

Consumer Confidence Hit by Iran War

Elm said that consumer confidence had been falling for some time, but that the Iran war had made things worse.

The conflict has pushed fuel prices sharply higher, which has eaten into household budgets and made people less willing to spend on non-essential items like furniture or home renovation.

He added that lowering prices had become more important than ever, but that would be impossible without bringing down costs first.

IKEA is also changing how it operates its stores. The company is moving away from large out-of-town warehouse-style locations and opening smaller stores in city centres, aiming to bring the brand closer to where more people live.

The job cuts are part of a wider push to streamline operations and fund that transition.

IKEA has faced a difficult environment of slowing consumer demand, higher operating costs, and the effect of US tariffs on its global supply chain.

The 850 Inter IKEA cuts, combined with the 800 Ingka Group reductions, signal that the broader IKEA organisation is undertaking a wide-ranging restructure as it tries to return to sales growth.

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