IKEA founder says more layoffs are required

IKEA, the world's top furniture retailer, needs to cut more staff in the face of weaker consumer demand due to the economic downturn, the founder of the Swedish company said in a newspaper interview on Tuesday. IKEA, known for low-price, self-assembly furniture, has already cut staff by about 5,000 employees but Ingvar Kamprad, who founded the company in 1943 and now serves as an adviser to the group, said more was needed.

"It is naturally a disappointment, but it will unfortunately not be enough. It will be necessary to do significantly more on the staff side," he was quoted as saying in an interview with Swedish business daily Dagens Industri.

"We need to cut staff more mainly within manufacturing and logistics. This is about adapting to sales being far below budget as well as becoming more efficient."

Kamprad noted IKEA would be hiring thousands of employees per year across the world in coming years to staff new stores, though he added it was scaling back on expansion plans.

"The forecast shows the margin and earnings falling considerably this year. That is proof that we've been too lax in dealing with our existing stores," he was quoted as saying. "I've actually tried to warn for some time that we've had too much focus on expansion and now the board has chosen reduce the pace of new establishments significantly."

Source: Reuters