IKEA avoids layoffs, shifts employees as AI takes over routine work

IKEA has used artificial intelligence to automate routine customer service tasks, while shifting employees into higher-value roles, creating a new revenue stream worth over €1 billion (₹9,000 crore).

The Swedish retailer’s approach offers a counterpoint to widespread concerns that AI adoption will primarily lead to job losses, instead highlighting how automation can reshape roles rather than eliminate them.

AI TAKES OVER ROUTINE TASKS

IKEA deployed an AI chatbot, named Billy, to manage first-level customer interactions, including order tracking, product queries and general support.

The system now handles around 57% of customer conversations without human intervention, significantly reducing the operational load on support teams, futurist Brian Solis said in an interview with Info-Tech Research Group, as cited by India Today.

This shift reflects a broader industry trend where companies are using AI to streamline high-volume, repetitive tasks.

FROM SUPPORT AGENTS TO CONSULTANTS

Rather than treating automation purely as a cost-cutting tool, IKEA analysed the remaining 43% of interactions that required human input.

The company found that many of these queries were not transactional but advisory—customers were seeking guidance on interior design for homes and commercial spaces.

Instead of downsizing, IKEA reskilled parts of its customer service workforce, enabling employees to transition into interior design consultants.

This marked a shift from handling routine queries to delivering specialised, value-added services.

NEW BUSINESS MODEL EMERGES

Building on this insight, IKEA introduced a paid consultancy model for design services.

Within the first year, the offering is estimated to have generated nearly €1 billion in additional revenue, underscoring how AI-driven efficiency can unlock new business opportunities.

The move illustrates a broader shift in how companies are leveraging automation—not just to improve productivity, but to create entirely new service verticals.

The development comes amid mixed outcomes from AI adoption across industries.

While companies such as Klarna have previously reported that AI tools replaced the workload of hundreds of customer service agents, they later acknowledged challenges around service quality, leading to renewed human involvement, according to India Today.

Against this backdrop, IKEA’s strategy reflects a more balanced model, where AI handles scale and speed, while human employees focus on judgement-intensive tasks.

WHAT NEXT

As organisations continue to experiment with AI, the focus is increasingly shifting from cost reduction to workforce redesign.

IKEA’s experience suggests that the impact of AI may depend less on the technology itself and more on how companies choose to deploy it—as a replacement for jobs, or as a catalyst for new ones.