Ikea to Close Only Factory in US

The Swedish furniture company Ikea will close its only factory in Virginia, United States this December.

Ikea said it will close its plant to cut costs, moving the business to the European Union (EU).

"We made every effort to improve and maintain the competitiveness of this plant, but unfortunately the right cost conditions are not in place to continue production in Danville," Danville site manager Bert Eades stated. He noted that raw material prices are higher in the US than in European countries.

Meantime, Ikea runs factories in European countries such as Sweden Poland and Russia. The multi-national giant's new retail strategy, which is moving towards e-commerce has resulted in colossal job cuts.

In 2017, Ikea bought TaskRabbit, an online employment plate form, moving its investments further towards online services and digital. However, the company said last year that it would demobilize more than 7,500 of its employees to build 30 smaller stores in major cities, yet, such a shift could create around 11,500 jobs.

It is noteworthy that Ikea employs 20,000 employees and owns plants in nine countries.

[caption id="attachment_65872" align="aligncenter" width="1024"] Ikea's robots assembling a chair[/caption]