Ikea furloughs U.S. employees as stores remain closed

Ikea has joined many other U.S. retailers in furloughing its hourly employees.

The Swedish home furnishings giant said that, despite its best efforts to keep its 18,000 U.S. employees paid, it is furloughing its hourly U.S. employees along with members of its service office. Most of Ikea's U.S. business has been closed since March 16.

“Our priority is and has always been to take care of our 18,000 co-workers — to secure their livelihoods and ensure that they continue to be supported with benefits for as long as possible — in a way that we believe is fair and equitable,” Javier Quiñones president of Ikea Retail U.S. said in a letter posted on the company’s site.

“We have carefully considered many different scenarios, including how we operate our business during this crisis and the financial support options from the government that are available to individuals and families who have been impacted,” he added.

Ikea said the move allows hourly workers who are no longer able to work due to closures to apply for expanded unemployment benefits. The furniture and furnishings retailer said that it will continue to provide furloughed co-workers with benefits, including medical and prescription benefits through May 31, 2020, and will pay their co-worker contribution.

“Our goal is to be able to gradually welcome back our furloughed co-workers as soon as it is safe to resume business,” Quiñones noted.

Ikea’s e-commerce business remains open. “E-commerce will be the cornerstone of our business while our stores are closed to the public, and we are also taking immediate steps to improve the online experience for our customers and introducing new services such as contactless deliveries,” Quiñones said.

In the meantime, Ikea is trying to assist others during the crisis. The company is contributing a combined total of $1 million worth of product to the American Red Cross, departments of health in the most heavily impacted states as identified by the Centers for Disease Control (CDC), and local nonprofits in its neighboring communities.

Ikea operates more than 430 stores globally, including 50 stores in the United States. The company previously announced temporary closures in countries heavily impacted by COVID-19 including Austria, Belgium, Canada, Czech Republic, Denmark, Germany, Italy, France, the Netherlands, Poland, Slovakia, Spain and Switzerland.