Telia unveiled a revised strategy intended to streamline its operations, a move which will see 3,000 jobs shed by the beginning of December.
The Sweden-headquartered operator noted it already cut 450 staff in the year-to-date, with the remainder due to go by 1 December. It had around 18,000 staff and 1,370 resource consultants at end-2023, the baseline used for its calculations.
“While Telia already holds strong positions in its markets, the company sees opportunities to further increase its efficiency and simplify its structure”, it stated.
Telia hopes to “become faster in decision-making and commercial execution”, while “ensuring its workforce is increasingly engaged, accountable and empowered to create impact”.
The operator intends to focus on maximising the value of its network infrastructure and services, along with plans to amend its structure by decentralising some divisions.
Shifting responsibility from group level will enable Telia’s national units to “better serve customers and capture growth” based on local needs, cutting overlaps and “simplifying interfaces”.
Telia president and CEO Patrik Hofbauer said the “tough decision” on staffing was necessary to ensure the company’s long-term success. The revamp will “eliminate barriers to execution and reduce layers of organisational complexity”.
Hofbauer also believes Telia will be better placed to capitalise on growth opportunities and “generate enough cash” to cover investments and dividends.
All-told, Telia expects to shed SEK2.6 billion ($252.1 million) from its annual costs, albeit with an SEK1.4 billion restructuring charge to be booked in H2.
The operator noted staff changes are subject to regular negotiations with unions, with more details on the cuts to be released once those talks conclude.
Finance
Telia separately detailed a change in its vendor financing programme, an element in its working capital management which provides it with extended payment terms.
It intends to reduce the volume of contracts covered by the scheme by half this year, a move it asserted as a win for all parties given “the current macroeconomic environment”, while also bringing the size of the programme closer to “wider industry levels”.
Accounts payable under the initiative stood at SEK11.5 billion at end-2023 and the restructuring is ultimately expected to lower cash flow volatility with “limited effects on net profit”.
Telia expects negative cash flow effects of up to SEK6 billion during H2 as a result of the plan, “relating to working capital”.
