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From Home Furnishing Business
Ekornes to Downsize Operations in Norway, Asia
January 4,
2023 by HFBusiness Staff in Business Strategy, Industry 
Upholstery major Ekornes said it is downsizing operations in Asia and its home country of Norway to combat a post-pandemic drop in demand and increased costs.
The company said operations in Norway will be downsized by up to 150 full time equivalent positions. This comes in addition to a reduction of 80 positions implemented in September. In addition, approximately 40 positions will be eliminated from its support functions and headquarters operations.
In the Asia Pacific region, Ekornes will concentrate operations in Thailand and close a factory in Vietnam – a move that will eliminate about 700 jobs. The company said it has made “substantial investments” in the production facility in Thailand to enable the concentration of all Asian operations at one location.
This process will be completed during the first quarter, the company said.
According to Ekornes, demand for furniture increased significantly during the Covid-19 pandemic from 2020 and into 2022 but is now returning to pre-pandemic levels.
Combined with a general slowdown in the global economy, these trends are having a negative impact on Ekornes’ sales and order development. At the same time, cost inflation puts pressure on margins, particularly within raw materials and transportation, negatively affecting earnings in the fourth quarter of 2022 and moving into 2023.
“The market environment is changing and Ekornes must adapt production capacity and protect profitability to stay competitive. Our leading products and brands are sold across the world, and we need to be cost-efficient and flexible to take good care of our customers, partners, and employees,” says interim CEO Fredrik Ødegård Nilsen.
He said the workforce reductions will bring employment back to pre-pandemic levels.
When the reductions are complete, Ekornes will have five factories in Norway and one each in Thailand, Lithuania and the U.S.