Ikea to Lay Off 7,500 Employees, Shift Toward Smaller Stores as It Reorganizes Global Business

An Ikea furniture store location in Woodbridge, Virginia, is seen in this file photo from Jan. 5, 2016. (Credit: Saul Loeb/AFP/Getty Images)

An Ikea furniture store location in Woodbridge, Virginia, is seen in this file photo from Jan. 5, 2016. (Credit: Saul Loeb/AFP/Getty Images)

Ikea is laying off about 7,500 employees and reorganizing its global business.

Ingka Group, which owns and operates most Ikea stores, said Wednesday it is cutting its global workforce by 5% and shifting toward smaller stores and more online shopping.

“We recognise that the retail landscape is transforming at a scale and pace we’ve never seen before,” CEO of Ingka Group Jesper Brodin said in a statement. “As customer behaviours change rapidly, we are investing and developing our business to meet their needs in better and newer ways.”

The cuts will hit administrative and support jobs. Ikea said that fewer than 75 jobs will be eliminated in the United States.

Ikea said the reorganization could lead to the creation of 11,500 new jobs as it expands into 30 new smaller-format stores in cities around the world. Ingka currently owns 367 Ikea stores and employs 160,000 people of Ikea’s 208,000 global workforce.

“We will put greater emphasis on making our existing stores even better and taking the opportunity to renew and reinvent our business in a way that is inspired by our history, culture and value,” Brodin said.

Ikea recently opened its first store in India and plans 25 more there.