IKEA Shrinks Workforce Amid Consumer Shift

Inter IKEA has confirmed it will lay off 850 workers across its global operations. The furniture brand franchisor operates in 63 countries.

The cuts come as the company moves towards a new retail model. Inter IKEA plans to open smaller city centre stores to improve accessibility for customers.

"We need to become faster, shorten the decision-making processes and simply concentrate our efforts on these priorities," Inter IKEA COO Henrik Elm tells Reuters in an interview.

The job losses represent around 3% of Inter IKEA's workforce.

Consumer confidence falls

Henrik says customer confidence has declined due to the Iran war. Fuel price increases have reduced consumer spending on non-essential items.

"In times when consumer confidence is very much affected, the disposable incomes are really going down for many, ​especially the consumers we want to reach," he says.

"Our ability to ​lower the ⁠prices so they can afford IKEA is more essential than ever before, and of course you can't achieve that if you have too high a cost base."

According to Inter IKEA, the company has seen profits fall for two consecutive years. Revenue has declined despite volume growth.

The company attributed the revenue drop to higher sourcing costs through increased US tariffs. 

Leadership change follows decline

Inter IKEA appointed Jakub Jankowski as CEO in January 2026. He replaced Jon Abrahamsson Ring, who served in the role for close to 8 years.

Jakub joined IKEA in 2001. He has held leadership positions in Romania, the Netherlands, Switzerland, Sweden and Poland.

"I am truly honored and humbled by the task, and I am looking forward to building on the solid foundation that Jon leaves behind," Jakub says upon his appointment.

"There is only one way to build success and continue to develop IKEA as the leader in life at home. And that is to do it together – with all parts of the value chain."

"I strongly believe in the IKEA direction and in continuing the work to make IKEA even more affordable, accessible and sustainable."

Franchisees follow restructuring approach

Ingka Group announced plans to cut 800 jobs as part of the same operational changes. The company is Inter IKEA's largest franchisee.

The cuts will affect office-based workers in Sweden and the Netherlands. Ingka Group aims to reduce costs and speed up decision-making processes.

"We have grown too complex in a retail environment that requires speed and agility," says Juvencio Maeztu, CEO of Ingka Group.

"Simplicity is one of our core values, and with this step, we are putting it at the centre of how we organise, work and lead the company."

"This change is driven by our purpose – not maximising profit. It is about bringing our focus and decisions closer to our customers and the co-workers who serve them every day."

"This step will create the right pre-conditions to grow and lower prices while staying true to our vision of creating a better and more affordable and sustainable everyday life for the many people."

According to Ingka Group, the franchisee accounts for 87% of global IKEA sales.