Scandinavian furniture giant Ikea has axed 5,000 jobs as it struggles in the toughest market in living memory.

The company employs 120,000 people worldwide – around 9,500 in the UK – but will not say how many jobs have been cut at its British operations over the past year.

About 500 people work at its massive 185,000 sq ft superstore beside the M6 at Wednesbury.

The world’s largest furniture retailer, Ikea has seen years of record growth slow to a virtual standstill.

Chief executive Anders Dahlvig said he expected sales for the current year – ending on August 31 – to be £18.3 billion, just 1.5 per cent higher than last year

That compares with 7.1 per cent growth last year and 14.1 per cent in 2007.

Mr 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.”