IKEA Extends Wages Payment to Russian Local Employees

IKEA Extends Wages Payment to Russian Local Employees

 IKEA parent company Ingka Group has extended the pay period for 12,000 staff in Russia until next August In early March, IKEA said it would temporarily suspend their business operations in Russia due to supply chain disruptions and unstable market conditions due to the conflict between Russia and Ukraine. 

IKEA said it would provide wages for all local staff in Russia who were directly affected by the closure of the IKEA business in Russia. Ingka Group Retail Manager, Tolga Oncu said that his party will continue to monitor the current situation to make further decisions. “We have managed to extend it to six months. We are constantly monitoring, analysing, seeing what happens and will make decisions as we progress." said Tolga Oncu, quoted by Reuters.com. But Oncu declined to provide details on the source of the funds they use to pay their staff wages. "We comply with all sanctions. 

We take advantage of the assets we have (in Russia).” he said. Western companies have been flocking to cease operations in Russia, following Russia's invasion of Ukraine and sanctions imposed by the country. Many companies are announcing indefinite cessation of operations in Russia. Companies such as McDonalds and Renault said they would now continue to pay their staff in Russia. IKEA operates through a franchise system with Ingka as the main franchisee, who is also responsible for supply.

 In Russia, Ingka employs as many as 2,500 workers in their three factories. Ingka, who is one of the owners of the largest shopping centers in the world, has so far opened 14 shopping centers in Russia under the "MEGA" brand. Ingka has 17 stores and one distribution center in Russia. Several employees have been assigned to return to work, to carry out returns, as well as store and warehouse maintenance.

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