Topline
Home retail giant IKEA announced Wednesday it will significantly scale back its operations in Russia, closing four factories and shedding some of its Russian workforce, becoming the latest multinational firm to permanently punish Russia for its invasion of Ukraine.
Key Facts
IKEA’s holding company, Inter IKEA, said in a release it would close the four factories it operates in Russia and two of its logistics offices in Russia and Belarus.
IKEA also said it would “reduce” its workforce in the countries, without specifying how many workers will be included in the layoffs, though the company said in March it had about 15,000 employees in Russia and Belarus.
Ingka Group, which operates most of IKEA’s stores, will sell its furniture inventory in Russia, the company said.
All Russian IKEA locations will remain closed, though Ingka will keep its 14 malls in Russia open.
IKEA explained it didn’t believe it was “possible to resume operations any time soon” as “the devastating war continues.”
Key Background
IKEA paused all retail business in Russia and Belarus in March. There are 17 IKEA stores in Russia, accounting for about 4% of the 469 IKEA locations globally. The company said in March it would pay its Russian employees through August. IKEA is one of the hundreds of companies to scale back its Russian operations – or pull out of the country entirely – after Russia invaded Ukraine in February.
Tangent
McDonald’s is perhaps the company that’s attracted the most attention for its decision to exit the Russian market in wake of the war, and the American fast food titan announced last month it would sell all of its Russian locations to a local operator. The Russian successor of McDonald’s opened Saturday to significant fanfare.
Further Reading
‘The end of an era’: Ikea, Russia’s middle class and the new cold war (Financial Times)
‘Tasty And That’s It’: Former McDonald’s Restaurants Reopen In Russia Under New Name (In Photos) (Forbes)
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