Finnish company Stora Enso is planning to implement company-wide restructuring actions to improve its ‘profitability and competitiveness’ in the long term.
The company intends to swap its focus on capital allocation in the strategic growth markets with an increased focus on customer centricity, cost reductions and business.
Once executed, the proposed plans would result in the reduction of a total of 1,150 employees from Stora Enso’s global workforce.
Out of these 1,150 positions, 250 are management and support positions from the Packaging Materials divisions that would be removed during the period of 2023-24.
Approximately 600 employees are expected to be removed from the company’s four facilities that are going to shut down permanently.
These facilities are the Sunila pulp production unit in Finland, a containerboard line at its Ostrołęka site in Poland, the De Hoop containerboard site in the Netherlands, and Näpi sawmill in Estonia.
The remaining 300 positions will be 'reduced' after the company begins change negotiations regarding its planned reduction of office employees within its group functions.
Enso currently has 1,300 employees supporting group functions and the planned reduction of these 300 employees will be made from the group’s European offices.
Enso's president and CEO Annica Bresky said: “These measures are of course very difficult and would not be proposed unless it was absolutely necessary for our long-term competitiveness.
“We are at a critical juncture in our strategy advancement, and to further our market position an increased focus on capital allocation and decentralised empowerment is needed. This sadly means that assets suffering from challenged profitability would need to be closed, in combination with a more streamlined headquarter organisation.
“Through these actions we would be able to continue to deliver strategic growth from more resilient and cost-efficient business platform, better equipped to support long-term growing demand for Stora Enso’s renewable products.”
The company is estimating that the proposed restructuring actions would result in decreasing its annual sales by €380m ($416m), based on the previous year’s figures.
Conversely, operational earnings before interest and taxes are expected to improve by €110m annually.
