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Ikea joins H&M and Spotify in suspending operations in Russia

Swedish furniture giant Ikea announced on Thursday it would suspend its activities in Russia and Belarus, affecting nearly 15,000 employees, 17 stores and three production sites, in response to the war in Ukraine.

Ikea joins H&M and Spotify in suspending operations in Russia
File photo of an Ikea store in Stockholm. Photo Janerik Henriksson/TT

“The war has had a huge human impact already. It is also resulting in serious disruptions to supply chain and trading conditions. For all of these reasons, Ikea has decided to temporarily pause operations in Russia,” the company said in a statement to AFP.

The suspension mainly concerns Russia, where the Swedish group has been present since 2000 and is one of the largest Western employers.

Operations in Belarus would also be halted, though the country hosts only a few suppliers and has no shops, according to Ikea.

“The devastating war in Ukraine is a human tragedy, and our deepest empathy and concerns are with the millions of people impacted,” the company said.

“These decisions have a direct impact on 15,000 Ikea co-workers, and the company groups will secure employment and income stability and provide support to them and their families in the region,” Ikea said.

While the stores operated by the Ingka group account for the bulk of the workforce affected, 12,000 people, Ikea also has nearly 2,500 employees working in manufacturing, with three factories in Russia.

According to the company, 47 suppliers in Russia and 10 in Belarus, would be affected by the decision, which also puts a stop to imports and exports between the two countries.

Prior to this announcement, Ikea had initially announced that it would leave its shops in Russia open, which was met with criticism in Sweden.

Several other Swedish companies have already halted their Russian operations over the war and sanctions imposed on Russia.

On Monday, Swedish truck maker Volvo said it was stopping sales and halting production at its Kaluga plant, and telecoms giant Ericsson also said it would halt deliveries to Russian clients. On Wednesday, Swedish clothing giant H&M said that it would halt all sales in its Russian stores.

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BUSINESS

Huawei loses Swedish appeal over 5G ban

A Swedish court on Wednesday rejected an appeal from China's Huawei over the government's decision to ban the network equipment giant from the rollout of 5G mobile network infrastructure in the Nordic country.

Huawei loses Swedish appeal over 5G ban

The administrative court of appeal in Stockholm said in a statement it believed it was fair to assume that the use of Huawei’s products in central functions of the 5G network “can cause harm to Sweden’s security.”

After the UK in the summer of 2020, Sweden became the second country in Europe and the first in the EU to explicitly ban Huawei from almost all of the network infrastructure needed to run its 5G mobile network.

Beijing warned at the time that the Swedish Post and Telecom Authority’s (PTS) decision could have “consequences” for the Scandinavian country’s companies in China, prompting Swedish telecom giant and Huawei competitor Ericsson to worry about retaliatory measures.

The PTS’ decision also included a provision that equipment already installed had to be removed by January 1, 2025, which the appeals court also confirmed.

“Sweden’s security is a particularly strong interest and the Swedish Post and Telecom Authority’s decision is based on a real, current and sufficiently serious threat to Sweden’s security,” judge Anita Linder said in a statement.

Huawei first appealed the decision to a lower court which also sided with the PTS in June 2021.

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