Have you walked into a furniture store recently and felt like everything costs more than it used to?
You are not alone. Many shoppers are now looking for affordable ways to furnish their homes, including buying used furniture through resale marketplaces.
Over 48% of Americans have purchased used furniture, and 78% of those are likely to buy it again, according to 2024 Censuswide data.
And while furniture prices are not rising as fast as they were during peak inflation years, shoppers are still paying more than they did a year ago.
The Consumer Price Index for furniture and bedding rose 1.3% over the year ending April 2026, and the broader household furnishing and supplies category rose 2.8%, according to the U.S. Bureau of Labor Statistics.
For an affordable furniture retailer like IKEA, whose identity is built around affordable home furnishings, even modest price pressure matters.
Now, IKEA’s global franchisor says it needs to restructure to keep that affordability promise.
IKEA franchisor cuts 850 jobs
Inter IKEA Group owns the IKEA concept and is the worldwide IKEA franchisor, meaning it is responsible for developing IKEA products and managing the global supply chain.
The franchisor has said that in an attempt to simplify operations, it will reduce its global workforce by around 850 positions.
Inter IKEA, which has decided to lay off 850 employees, of whom 300 are expected to be in Sweden, said the move is part of a long-term effort to achieve its goal of providing customers with a relevant product range, lower prices, and a strong customer experience.
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In a statement to TheStreet, the company said these changes are not linked to IKEA retail in the US and are instead within the Inter IKEA Group.
The company said Inter IKEA Group has offices, operations, and co-workers worldwide, including in the U.S., as IKEA is the global franchisor. And that all parts of the group were part of the review.
The company said all parts will be affected, either directly or indirectly, and that Inter IKEA is currently in dialogue with co-workers across the group. The new organization is intended to be finalized around the turn of the year, according to the statement.
IKEA says its business became too complex
The company said that IKEA exists to create “a better everyday life for the many people by offering well-designed, functional home furnishings at prices low enough for as many people as possible to afford.”
But Inter IKEA acknowledged that the retail environment has changed.
Despite many positive achievements, Inter IKEA Group has grown a bit too complex and too fragmented in a retail environment that requires simplicity and speed.
IKEA has continued to invest in affordability while operating in a changing retail environment marked by increasing geopolitical and economic uncertainty.
And now moving forward, Inter IKEA and IKEA’s 13 franchisees will focus on three common goals:
- Increased sales growth
- Significantly reduced prices
- Boosting visits across customer meeting points
To achieve these goals, the company’s operational structure needs to be simplified, and operations need to run faster.
IKEA cuts jobs after profits fall
IKEA’s global presence has grown considerably over the years. In 2025, it opened 66 new sales locations worldwide, from full-size stores to smaller retail formats. Global visitation to IKEA stores also grew to 915 million, whereas online sales rose to 28% of total IKEA turnover, signaling stronger e-commerce.
But, according to its Fiscal Year 2025 report, the Group recorded total revenue of €26.3 billion, down slightly from €26.5 billion in FY 2024.
Total operating income fell to €1.7 billion from €2.3 billion, while net profit declined to €1.5 billion from €2.2 billion in FY24. The company attributed lower sales to “substantially lower wholesale prices to IKEA retailers to support affordability,” and its impact could be seen well into 2025, doubly impacted by the downward trend in raw materials and commodity prices.
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But while the lower price strategy helped it attract more customers, profits during the period fell.
Nonetheless, Inter IKEA continues to put affordability and customers first. While these 850 cuts will impact the workers, IKEA is ensuring that lower prices remain a priority.
“Today, affordability is more relevant than ever,” said Elm. He added that “clear goals, fewer priorities and a simplified organization will enable faster decision-making, lower costs, improving our ability to offer lower prices for customers.”
For customers, it means lower prices going forward, and for workers, hundreds of job cuts.
This restructuring is also what IKEA hopes to keep it competitive in the long run.
Furniture retailers face price and tariff pressure
The broader home sector has been under pressure as shoppers pull back from big purchases. The rise of second-hand furniture marketplaces and the economic uncertainty have caused many shoppers to pull back on extra spending.
According to Retail Dive, the home category saw a surge in pandemic-era demand as consumers spent more on their living spaces. But over time, the sector has experienced consistent year-over-year sales declines, as reported by the US Department of Commerce’s monthly retail sales reports.
Amidst this pressure, IKEA’s tradeoff is clear: if it wants to keep prices low for shoppers, it must cut costs behind the scenes.
That makes price one of the most important battlegrounds for furniture retailers.
Furniture and home furnishing store sales in the US reached more than $135 billion in 2025, while the broader US furniture market surpassed $250 billion that same year, according to Statista.
The market is also heavily exposed to global trade, with furniture imports topping $72 billion in 2024, and China, Vietnam, and Mexico are the country’s top furniture import partners.
Simply put, American furniture retailers depend a lot on products made overseas.
This means that any supply chain disruption and tariff shifts can quickly make furniture more expensive to source and sell.
And for IKEA, which competes aggressively on low prices, this creates a difficult challenge. The company has to keep furniture affordable for shoppers, while also finding ways to cut costs behind the scenes. For the 850 workers, this effort now means their roles may disappear.
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