Ikea has made 5,000 redundancies this year as it seeks to navigate through the toughest furniture market in memory.

The world’s largest furniture retailer made the redundancies from its 120,000-strong workforce as years of record growth in the retailer look to have been broken.

Ikea’s chief executive Anders Dahlvig said he expected sales for the year ending August 31 to be €21.5bn, just 1.5 per cent higher than last year. In 2008, sales grew 7.1 per cent, and in 2007, they grew 14.1 per cent.

Dahlvig said: “We have never had to make such cutbacks before. But it is absolutely necessary in order to adjust our costs and our capacity to demand, which is much lower than we had expected. The force of the economic downturn has clearly surprised us.”

Dahlvig did not reveal how many jobs have been cut in the UK.