IKEA announced on Wednesday that it would sell factories, close offices, and lay off over 28,000 workers in Russia, the latest move by the world’s largest furniture company to curtail its activities in the country following Moscow’s invasion of Ukraine.
The action comes after IKEA temporarily closed stores and halted sourcing in Russia, joining a major business exodus as Western corporations scrambled to comply with Western sanctions and amid Kremlin threats to seize foreign assets.
The Swedish firm has continued to pay its employees and will continue to do so until the end of August.
It stated on Wednesday that it does not see any possibility of resuming sales in the country, where it launched its first store in 2000, in the near future.
As a result, Inter IKEA, which is also in charge of supply, announced that it will begin looking for buyers for its four factories, permanently close two procurement and logistics offices in Moscow and Minsk, and lay off employees.
IKEA employs 15,000 people in the country, whereas Ingka Group, which controls all IKEA stores in Russia, employs 12,500 people.
‘Unfortunately, nothing has changed, and the dreadful battle continues. Businesses and supply networks around the world have been severely damaged, and we do not expect operations to restart anytime soon,’ Ingka Group issued a statement.
Nonetheless, Ingka, one of the world’s largest shopping mall operators, is keeping its 14 ‘MEGA’ malls in Russia open.
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