IKEA Kept 8,500 Jobs. Then Made $1.4B More. Here's How.
IKEA's AI took 47% of customer service in 2022. They retrained 8,500 employees into paid design consulting. Result: $1.4B in new revenue. What smart CEOs do differently.
In 2022, IKEA's AI took over 47% of customer service. 8,500 employees still have jobs. And IKEA made $1.4B more.
Let me say that again.
8,500 jobs SAVED. + $1.4 BILLION in NEW revenue.
Same year. Same company.
Using the same AI rollout every other CEO is trying to force.
BTW, I'm looking at you 👀 Oracle and every CEO working on who to lay off just before writing that they're "embracing AI to streamline operations" for their investor relations page.
Here's what IKEA did instead of laying anyone off.
They asked one question: "What can these 8,500 people do that AI can't?"
The answer was interior design.
The same employees who already knew every product, who'd been trained in customer empathy, who understood the IKEA brand inside out, were retrained to run paid interior design consultations.
That new revenue line is now worth €1.3 billion ($1.4B equivalent) in FY22.
That's 3.3% of IKEA's total sales, with a target to grow to 10%. Source: Ingka Group, June 2023.
❌ CEOs cutting headcount to "save money" are losing institutional knowledge they spent millions (or billions) building.
➡️ CEOs retraining people into AI-enabled roles are building the workforce of the future. 🙌
Smart CEOs are the ones saying - how do we leverage the human capital we have to get better results for our customers?
💡 The companies that are building the workforce of the future will redistribute the work AI takes and find a better problem for them to solve.
For the full framework, read Candidate Value Ladder.
If this hit close to home, come get the whole framework at TheoryOfHireability.com.
Frequently Asked Questions
How did IKEA keep 8,500 jobs when AI took over customer service?
In 2022, IKEA's AI took over 47 percent of customer service. Instead of laying off the 8,500 employees affected, IKEA asked one question: what can these people do that AI cannot? The answer was interior design. Those same employees, who already knew every product and were trained in customer empathy, were retrained to run paid interior design consultations.
How much new revenue did IKEA generate by retraining instead of firing?
The new paid interior design consultation line is worth roughly 1.3 billion euros, about 1.4 billion US dollars, in FY22. That is 3.3 percent of IKEA's total sales, with a target to grow to 10 percent. Same year, same company, same AI rollout that other CEOs are trying to force, and 8,500 jobs saved on top of the new revenue.
What are smart CEOs doing differently with AI right now?
Smart CEOs ask how to leverage the human capital they already have to get better results for customers. CEOs cutting headcount to save money are losing institutional knowledge they spent millions or billions building. CEOs retraining people into AI-enabled roles are building the workforce of the future by redistributing the work AI takes and finding a better problem for people to solve.
What does this mean for senior professionals worried about AI?
The companies building the workforce of the future will redistribute the work AI takes and find better problems for people to solve. That is what Career Ascension looks like in the wild. Your job is to make your value obvious enough that a smart CEO retrains you rather than replaces you, and that comes down to how clearly you sit on the Candidate Value Ladder.
