Inter IKEA, which handles sourcing for the global IKEA franchise network and supplies 13 franchisees, announced plans to cut 850 jobs as part of a broader effort to reduce operating costs and accelerate decision-making. The layoffs are being implemented as consumer demand softens and the company rethinks its store footprint to better engage urban shoppers.
Henrik Elm, Inter IKEA's Chief Financial Officer, said the organisation needs to "become faster, shorten the decision-making processes, and simply concentrate our efforts on these priorities." He described the moves as necessary to improve efficiency and support the group's goal of lowering consumer prices.
The company has faced pressure from rising costs and U.S. tariffs. At the same time, Inter IKEA is undergoing a strategic transition away from very large suburban warehouse formats toward more numerous, smaller stores in city centres - a shift intended to draw customers back into physical locations.
The 850 roles being removed include 300 positions in Sweden, where Inter IKEA maintains a major hub in Almhult, the town associated with IKEA's founding. Across the organisation, the reductions equal roughly 3% of Inter IKEA's global workforce of about 27,500 employees.
Inter IKEA's actions follow leadership changes across the IKEA system. Both Inter IKEA and its largest franchisee, Ingka Group, installed new chief executives late last year after the business reported its second straight year of declining sales. Ingka Group also revealed plans in March to trim 800 roles from its office workforce.
Elm pointed to a longer-term slide in consumer confidence that has been "accelerated" by the Iran war. He said the conflict has pushed fuel prices higher, which in turn has strained household budgets and reduced willingness to spend on non-essential items such as home renovations or new sofas.
"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," Elm said. He added that lowering prices so customers can afford IKEA products is critical, and emphasised that achieving that goal is difficult if the company maintains a high cost base.
Context and implications
Inter IKEA's cost-cutting measures focus on reducing overhead and accelerating strategic initiatives in response to a tougher consumer environment. The company manages procurement and distribution for franchisees and is adjusting both its operating model and physical store strategy to regain momentum.