Furniture giant Ikea plans to cut 7,500 jobs worldwide as part of a plan to cater more to online customers, the company said Wednesday.
The shakeup at the Swedish firm, first reported by the Wall Street Journal, shows that even Ikea – known for its massive suburban stores and affordable assemble-yourself furniture – is not immune to the online competition that has affected other brick-and-mortar retailers.
Most of the job cuts will not hit Ikea’s retail workers, but rather those in office positions including human resources and communications, the Journal said.
Meanwhile, the firm plans to create thousands of new jobs – 11,500, or 4,000 more than it is cutting – by opening 30 new stores in urban centers and by investing in its e-commerce and delivery offerings.
In Wednesday’s statement, Lars Petersson, Ikea’s manager for U.S. retail operations, said the company wants to “create the IKEA of the future by … being more accessible and fully embracing technology.”
In a financial report last month, the company said that during the 12 months ending Aug. 31 its website drew 2.5 million visits but accounted for only 5 percent of sales.
The same report noted that Ikea has been experimenting with retail concepts aimed at expanding beyond the massive suburban stores the company is known for. In the past year, the company has opened smaller stores — ones that essentially serve as showrooms but not warehouses — that make sense in city centers or smaller communities.
That mirrors a strategy Target and other big retailers have adopted as they try to stem the tide of online shopping by make in-store shopping more convenient.
Ikea has also opened temporary pop-up stores and remote pick-up points, which allow customers to order in store or online, then pick up items somewhere closer to home. That’s potentially more convenient than a trip to the ‘burbs and cheaper than paying to ship heavy goods.
Petersson said he expects only about 75 job cuts in the U.S. and noted that the company plans to open two stores next year in San Antonio and Norfolk, Va., creating about 500 new positions.
The company operates eight stores in California and five in the southern half of the state – Burbank, West Covina, Carson, Costa Mesa and San Diego.
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