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IKEA

Ikea to ‘scale down’ operations in Russia and Belarus over Ukraine

Swedish furniture giant Ikea said Wednesday it would "scale down" its activities in Russia and Belarus, after putting them on hold following the Russian invasion of Ukraine.

Ikea to 'scale down' operations in Russia and Belarus over Ukraine
An Ikea store. Photo: Ingka Group

Along with a slew of Western companies, Ikea announced in early March that it was suspending its Russian and Belarusian activities, affecting nearly 15,000 employees.

“Unfortunately, the circumstances have not improved, and the devastating war continues,” Ingka Group, which manages the majority of Ikea’s stores, said in a statement on Wednesday.

“Businesses and supply chains across the world have been heavily impacted and we do not see that it is possible to resume operations any time soon,” the company said, adding that it and the Inter Ikea Group had “decided to enter a new phase to further scale down the Ikea business in Russia and Belarus.”

The group said the retail business “will remain stopped, and the workforce will be reduced, meaning that many co-workers will be affected.”

Ikea has a total of 15,000 employees in Russia, including 12,500 employed by Ingka Group, the company said.

An Ingka Group spokesman said the company was not yet able to provide details on how many would be let go.

The company added that it planned “to sell out its home furnishing inventory in Russia,” and that the production side in Russia will “reduce the workforce and start the process of finding new ownership for all four factories.”

Two purchasing and logistics offices in Moscow and Minsk would also be permanently closed.

The Russian invasion of Ukraine, along with triggering unprecedented sanctions, sparked an exodus of foreign corporations including H&M, Starbucks and McDonalds.

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ABB

Swedish engineering giant ABB to quit Russia over Ukraine

Swedish-Swiss engineering giant ABB said on Thursday it will quit Russia as a result of the war in Ukraine and the related international sanctions against Moscow.

Swedish engineering giant ABB to quit Russia over Ukraine

Russia accounts for only one or two percent of ABB’s overall annual turnover and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

“ABB has decided to exit the Russian market due to the ongoing war in Ukraine and impact of related international sanctions,” the group said in a statement.

Russia accounts for only one or two percent of ABB’s overall annual sales and the decision to pull out will have an estimated financial impact in the second quarter of around $57 million, the group calculated.

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A large number of major western companies have pulled out of Russia since Moscow invaded its pro-Western neighbour on February 24.

“When the war broke out, ABB stopped taking new orders in Russia,” the group said.

At the same time, it said it continued to fulfill “a small number of existing contractual obligations with local customers, in compliance with applicable sanctions.”

Most of ABB’s dedicated Russian workforce has been on leave since March “and the company will do its best to support them as it realigns its operations in a controlled manner,” it said.

ABB has about 750 people in Russia and two production sites in the country located in the Moscow region and Lipetsk, as well as several service centres.

Separately, the group said that its net profit fell by 50 percent to $379 million in the second quarter, largely as a result of one-off charges, but also the cost of withdrawing from Russia.

Sales, on the other hand, grew by six percent to $7.2 billion in the period from April to June, ABB said.

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