Swedish furniture retailer IKEA will scale down its business operations in Russia and sell all four country-based factories, the RBC business daily reported Wednesday, citing the company’s press service.
IKEA, which employed some 15,000 people in Russia, temporarily closed its stores and suspended operations of its factories there in March amid the international fallout from Moscow’s invasion of Ukraine.
According to information obtained by RBC, the company’s management has now deemed the continuation of operations in Russia impossible due to difficulties with supply and transport logistics stemming from the war.
“Given this [situation], we don’t have the opportunity to restart sales in the near future. Therefore, we made the decision to scale down business operations in Russia,” said the message obtained by RBC.
“It is a difficult decision but we believe that it is necessary.”
The company is expected to lay off at least half of its 15,000 Russia-based employees by the end of the summer but will allow all staff to retain insurance benefits until the end of the year, according to information obtained by Ostorozhno Novosti Telegram news channel. Former IKEA employees will also be offered mental health support.
IKEA said it will also hold a sale of all home goods currently stocked in its Russian warehouses.