Around 15,000 employees have been directly affected by the closure
As the Ukraine-Russia crisis continues to extend, Swedish furniture giant IKEA has announced that it is temporarily halting operations in Russia and Belarus, directly affecting the jobs of about 15,000 individuals. IKEA, as well as its holding company Ingka Group, will pause operations in the said nations, citing the "huge human impact" of the war, as well as its resulting disruptions.
"The war has had a huge human impact already. It is also resulting in serious disruptions to supply chain and trading conditions. For all of these reasons, the company groups have decided to temporarily pause IKEA operations in Russia," said the company in a statement.
The furniture giant listed down the following specific steps it will carry out amid the suspension:
- Inter IKEA Group has taken the decision to pause all export and import in and out of Russia and Belarus.
- Inter IKEA Group has taken the decision to pause all IKEA Industry production operations in Russia. This also means that all deliveries from all sub-suppliers to these units are paused.
- Ingka Group has taken the decision to pause all IKEA Retail operations in Russia, while the shopping centre Mega, will continue to be open to ensure that the many people in Russia have access to their daily needs and essentials such as food, groceries and pharmacies.
The move has a "direct impact on 15,000 IKEA co-workers," according to the company. However, it assured that necessary measures were made to secure jobs for those who are affected.
"The ambitions of the company groups are long term and we have secured employment and income stability for the immediate future and provide support to them and their families in the region," the company said in a statement.
Ingka Group Retail Operations Manager Tolga Oncu also told CNBC in an interview that the employees affected would "get paid, in roubles, for at least the coming three months."
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IKEA described the situation in Ukraine as a "human tragedy," adding that the actions seek to keep its co-workers safe amid the war.
"Our deepest empathy and concerns are with the millions of people impacted," said the company. "The immediate actions of Inter IKEA Group and Ingka Group have been to support the personal safety and security of IKEA co-workers and their families, and we will continue to do so."
Meanwhile, the company said that it has already kicked off several initiatives with humanitarian organisations to support the affected people of the war.
It announced a donation of €20 million as humanitarian aid to those who were displaced by the conflict in Ukraine, in addition to the €10 million each from IKEA and Ingka Group to Save the Children and other organisations working in the local markets.
"This is in response to an emergency appeal from This is in response to an emergency appeal from UNHCR (United Nations High Commissioner for Refugees), the UN Refugee Agency, to scale up its assistance and protection to people affected by the conflict in Ukraine," said IKEA.
The furniture giant described the situation with Russia and Ukraine as "extremely critical and fast moving."
"The company groups are dedicated to navigate in this reality, with the best interest of people as the highest priority."
IKEA joins the growing number of Western companies pausing operations in Russia as a result of the ongoing war.