Telia Co., the Swedish telecommunications giant, announced on Wednesday that it will cut around 3,000 jobs, representing about 15 percent of its workforce.
The move is part of a significant restructuring plan aimed at simplifying operations and reducing costs.
The company currently employs approximately 19,000 people and is transforming to become a more customer-focused organization.
The restructuring comes as Telia seeks to implement a new operating model designed to streamline its business processes, reduce organizational complexity, and improve its balance sheet transparency.
This cost-cutting initiative is part of a broader plan to ensure the company’s long-term growth and financial stability.
Details of the Restructuring Plan
Job Cuts and Financial Impact
As part of the shake-up, Telia will reduce its workforce by 3,000 employees over the year.
The company said it expects to book restructuring charges of 1.4 billion Swedish krona ($135.9 million) in the second half of 2023.
These measures are projected to deliver annual savings of at least 2.6 billion krona once fully implemented.T
In addition to the job cuts, Telia announced plans to cut its vendor financing program by 50 percent during the second half of 2023.
This move is intended to simplify the company's financial operations, reduce cash-flow volatility, and enhance balancesheet transparency.
Commitment to Dividend Policy
Despite the restructuring charges and anticipated cash flow challenges, Telia’s board of directors has reaffirmed its commitment to the company's dividend policy, signaling confidence in the long-term success of the restructuring efforts.
CEO Comments on the Restructuring
Telia’s Chief Executive Officer, Patrik Hofbauer, emphasized the importance of the restructuring in positioning the company for future growth.
He said:
“This is a tough decision, but one that is necessary to ensure the long-term success of Telia,”
“Together with the board and my leadership team, we are set to eliminate barriers to execution and reduce layers of organizational complexity so that we can better serve our customers.”
The company also noted that all changes are subject to union negotiations, a key part of the process in Sweden.
Outlook for Telia
While the restructuring will bring immediate costs and workforce reductions, Telia’s leadership remains optimistic about the company’s ability to maintain its financial targets for the year.
The company has set its sights on improving customer focus and operational efficiency, positioning itself for sustainable growth in an increasingly competitive telecommunications market.
