- IKEA launched a controversial restructuring known as O4G – or organisation for growth – in 2017.
- As a result, some store employees will see pay cuts in the new year.
- The company extended optional pay protection until January 1, 2019.
Some IKEA US store employees will be ringing in the new year with pay cuts.
Employees have told Business Insider that some managers and team leads have had their salaries slashed, thanks to O4G – or organisation for growth.
O4G, which officially rolled out on October 15, 2017 throughout IKEA US, restructured store employee roles and store departments. As a result of altered job descriptions and the elimination of certain shopkeeper-level gigs, some employees will see a pay cut on January 1, 2019. One employee even described the situation of a colleague who was told a promotion would come with a pay cut, thanks to the restructuring.
Affected employees have been aware of said cuts since O4G launched. In its initial announcement regarding the restructuring, IKEA US also extended pay protection until 2019.
O4G has proven controversial with employees, to the extent that IKEA US President Lars Petersson recently apologised to workers for issues with its rollout. IKEA US has also announced its intention of bumping up the pay for employees in certain stores and departments. Still, many employees, whom IKEA calls coworkers, took issue with the method by which IKEA US went about launching O4G – especially in regards to the pay cuts.
“Everyone would have respected IKEA more if they’d done something dramatic like shutting down for a half a day so that they could get a meeting with all the coworkers and just say, ‘Listen, we realise that we’ve been doing some things wrong,'” former customer-service coordinator Gene Bender told Business Insider.
Bender himself almost took a $US10-an-hour pay reduction thanks to O4G, but was able to secure a leadership role in his store before quitting, which helped him avoid the cut. Business Insider has spoken to 27 other current and former IKEA employees about changes brought about by O4G. Most of the current employees requested anonymity in order to avoid retribution.
An IKEA spokesperson did not immediately respond to Business Insider’s request for comment on the pay cuts.
“Our objective was to empower our coworkers to meet our customers’ expectations in today’s multichannel environment, and strengthen our position in the fast changing US retail environment,” a company spokesperson told Business Insider in November. “Hundreds of coworkers from throughout IKEA US contributed to the process of creating the new organisation’s design, including coworkers from our stores.”
It’s impossible to say how many IKEA US employees will be affected come January 1. But of the employees Business Insider spoke with, the majority said they’d heard of at least one colleague taking a substantive pay cut due to O4G. These employees said that the pay cuts will mostly affect team leads and managers.
Some store employees have described pay cuts of up to $US30,000 a year for some managers. And many of the employees whom Business Insider spoke to said that they fear that their store’s turnover rate will spike among store leaders thanks to the drop in pay.
“I am looking for other employment,” one employee whose annual salary was cut by thousands of dollars told Business Insider. “As soon as they started talking about O4G, all of the old-timers and anyone getting paid above cap for any reason at all, we were just all making eye contact and shaking our heads. Everyone felt the same way.”
A different employee from another state told Business Insider that they felt that O4G pushed out more experienced employees. The employee added that they are currently seeking a new job.
“To me, it feels like they’re pushing out the high-earning people,” the employee said.
Are you an IKEA employee with a story to share? Email [email protected]
- Read more:
- In a leaked video, IKEA US head apologizes for restructuring that store employees say tanked morale and pit them against each other
- IKEA announced it would be raising wages for its most ‘disgruntled’ group of US employees
- IKEA employees say that changes to the stores are creating a divisive environment where ‘nobody is willing to help’
- IKEA was once touted as one of the best places to work. Now workers are fleeing over a policy they say has backfired spectacularly.
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