- IKEA US President Lars Petersson apologised in a video announcement sent to employees on Tuesday, following reports of the furniture retailer’s controversial restructuring.
- In the video, Petersson, along with Orlando store manager Monica Bogstad, outlined a plan to boost morale.
- Petersson said that management didn’t see “the balance between business and people the way we should have done as great leaders” while rolling out the restructuring.
IKEA US President Lars Petersson issued an apology to employees on Tuesday, in response to a recent internal controversy about the store’s restructuring.
“We have heard you,” Petersson said in an internal video announcement reviewed by Business Insider. “I have heard you – that you are disappointed with the way we have implemented O4G.”
IKEA US employees have told Business Insider that O4G – or “organisation for growth,” the name of the restructuring IKEA US officially launched on October 15, 2017 – had worsened the working environment within the stores, eroding teamwork between departments and leading to pay discrepancies between new and old coworkers.
An IKEA spokesperson did not immediately respond to Business Insider’s request for comment on the video.
IKEA Orlando store manager Monica Bogstad, who also appeared in the video, reiterated the intended purpose of O4G.
She said the move was supposed to make the stores more “customer-centric,” prepare the company for the increasingly “multi-channel world” of retail, “free up” employees from having to do administrative tasks, and bridge the gap between the stores and IKEA US’ service office in Conshohocken, Pennsylvania.
Petersson said that the company “made several mistakes” in its roll-out of O4G.
“We stopped the project too early,” he said. “We should have continued to communicate the project. We also saw how difficult it was for everyone to learn new jobs and all the competencies you need and all the skills to do your job. We also really didn’t see the balance between business and people the way we should have done as great leaders. And for all of that, I am truly sorry. I’m sorry for that.”
He said that the intention had originally been to have “more people on the shop floor,” but the plan had to shift “because the sales went down before and during implementation of O4G.”
“Many of the things we had promised you to do, we actually couldn’t do because of re-dimensioning and cost adaptation,” he said.
The announcement featured news that Bogstad would be helming a program dubbed the “positive people movement” in response to coworkers’ complaints about the restructuring.
Bogstad explained that the positive people movement will focus on fostering leadership and development that reflects IKEA’s culture and values.
“This is what inspires us and this is what we will focus on moving forward,” she said. “I can promise you with this project that we have started up, we will do more. We will listen more. We will dig deeper. We will reevaluate. And we will adjust for the best of the business and the people. And I have full support from the US management team, who are on board, who are fully committed. We need to turn this around.”
As part of a follow-up, she said IKEA US employees would receive a survey asking for “very honest, quite specific feedback” in January 2019.
This announcement follows up on the news that IKEA bumped up the pay for merchandising basics employees, a department that one IKEA coworker described as the most “disgruntled” in the store. It was also announced that IKEA US would raise the pay in 14 locations, based on a reevaluation of the living wage in those areas.
“We cannot change the past, but we can shape our future,” Petersson said. “We are in the middle of creating a whole new IKEA together. It’s really about togetherness. It’s not just me and Monica. It’s all of you that need to help me and us here to move ourselves forward in this positive change.”
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