Ikea puts Russian factories up for sale, plans job cuts

Ikea said on Wednesday it would market factories, close places of work, and lessen its 15,000-strong workforce in Russia, the most recent shift by the world’s biggest home furniture model to minimize its functions there subsequent Moscow’s invasion of Ukraine.

The go comes after Ikea briefly shut shops and paused sourcing in Russia, signing up for a mass corporate exodus as Western corporations rushed to comply with Western sanctions and amid threats the Kremlin would seize foreign property.

The Swedish firm has ongoing having to pay employees and will do so right until the end of August.

On Wednesday, it claimed it did not see any possibility to resume sales in the place, wherever it opened its first store in 2000, in the foreseeable future.

As a end result, manufacturer proprietor Inter Ikea, which is also in demand of supply, claimed it would now start out hunting for prospective buyers for its 4 factories, forever shut two acquire and logistics offices in Moscow and Minsk, and slash team.

Ikea has 15,000 staff members in the nation, of which 12,500 work at Ingka Team which owns all Ikea stores in Russia.

“Sadly, the conditions have not improved, and the devastating war proceeds. Corporations and provide chains across the earth have been greatly impacted and we do not see that it is doable to resume operations any time quickly,” Ingka Group explained in a assertion.

Still, Ingka, also a single of the world’s largest browsing centre owners, is trying to keep its 14 malls in Russia, branded “MEGA”, open up.

The firm mentioned it wishes to assure persons have obtain to the basic principles they need, including clothing, groceries, and pharmacies, but it is repeatedly assessing the condition.

It also declined to remark on its strategies for the 17 shuttered merchants, stating in an email it was “exploring various solutions”.

The steps so far vary from some other important Western firms, this sort of as McDonald’s and French carmaker Renault, which have sold their belongings to nearby customers and give up the region completely.

The retail enterprise stays paused, Ikea claimed, but hinted it might open the doorways for Russians for a final time.

“To guarantee needed enterprise procedures, we are arranging the sale of homeware products that are in our warehouses to workforce and buyers. Dates will be introduced shortly,” Ikea explained.

It explained it may donate some inventory to men and women in need to have.

But advertising surplus stock and generating revenue there may perhaps increase eyebrows provided the public and political strain on companies not to make funds from executing organization in Russia.

“We thought of a huge variety of selections ahead of using the final decision to market off the stock, and there was no other viable solution,” the corporation mentioned in the e-mail.