The United Kingdom is currently experiencing the lowest unemployment rate it has in the last 2 years. With several companies announcing cuts for London jobs, for example, one can not help but wonder if this good fortune will continue. Among the businesses currently going through drastic changes is Ikea. The Swedish based furniture store recently let it be known that they intend to cut at least 300 management positions from their UK stores due to poor performance throughout the industry.

The news comes only 2 years after the opening of a new store in Edmonton, London, which, due to the popularity of the company’s products, caused a stampede in which five were taken to the hospital to be treated for injuries. One would-be customer had to be treated for a stab wound. The UK branch is still one of the company’s most popular, ranked as the third most profitable market, and brings in 11 percent of Ikea’s income. The United States and Germany are the only areas that generate more sales for the company.

The 300 managers will be given a chance to take a demotion and return to the store ’s main floor. There they would be expected to assist customers and stock shelves for a lower pay rate than they were previously receiving. The Chief Executive of Ikea stated that these job cuts were not decided upon as a way to increase profits. Instead he says that customers have requested better service and friendlier staff. The job cuts are seen as a way to be able to invest more toward this area of the business’ operations. According to the Chief Executive, the company had begun to become management heavy and the cuts were done to create more of a balance.

By giving the employees a chance to keep their jobs, if not the one they originally had, Ikea hopes to avoid being short staffed. At this time it is not known how many of these managers are willing to take a pay decrease and a less prestigious title along with more physical work as opposed to searching for new jobs.

Over all the furniture industry has suffered several difficult years recently. According to an Ikea spokeswoman, increased competition will likely cause this trend to continue for at least some time. Ikea maintains that their company is stilling doing, overall, better than many of its competitors in terms of profit.

This entry was posted on Friday, July 20th, 2007 at 5:19 pm and is filed under Job Search. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.