Report: Ikea has a morale problem

Between massive layoffs and the departure of its head of design, it has been a roller-coaster year for Ikea—and as 2018 comes to a close, the rocky ride continues for the Swedish furniture giant: A leaked video suggests that employee morale is at an all-time low.

In an internal video announcement sent to workers on Tuesday and leaked shortly thereafter, Ikea U.S. president Lars Petersson apologized to staff for the company’s poorly implementation of “O4G,” short for “organization for growth,” its U.S. restructuring effort launched in October 2017.

“We have heard you, I have heard you—that you are disappointed with the way we have implemented O4G,” Petersson says in the video, Business Insider reports, in an apparent indication of intensifying discontent among employees.

Petersson goes on to concede that the company has “made several mistakes” in the rollout of O4G, which had aimed to make stores more “customer-centric” in the rise of “multi-channel retail” and free up employees from administrative work, according to Monica Bogstad, an Ikea Orlando store manager who also appears and apologizes in the video.

“We stopped the project too early. We should have continued to communicate the project,” Petersson says. “We also saw how difficult it was for everyone to learn new jobs and all the competencies you need and all the skills to do your job. We also really didn’t see the balance between business and people the way we should have done as great leaders. And for all of that, I am truly sorry. I’m sorry for that.”

On the tails of bleak news from Kmart store closures and Sears’s bankruptcy filing this year, Petersson’s earnest concession is a shot to the heart of big box retail that continues to struggle in the face of e-commerce.