Telia sheds 3,000 jobs in three months

The Nordic operator on Monday declared its so-called change programme complete. It now has a decentralised organisation – that means its individual country operations are for the most part responsible for their own destinies – with a lower wage bill.

And the costs associated with the change came in lower than the telco predicted in September when it announced the plan, at 1.3 billion Swedish kronor (US$119 million), rather than the SEK1.4 billion it had earmarked.

Back then Telia shared that it aimed to cut almost half of the affected positions at its domestic unit. 1,400 jobs were slated to go in Sweden, while Finland was also hard-hit, losing 635. The remainder were split between its businesses in Lithuania, Norway, and Estonia, and a handful of other locations where the company has consultants or employees.

"We have made tough but necessary changes, and our employees' dedication during this time has been exceptional," said Telia Company chief executive Patrik Hofbauer. "Through our new operating model, we can serve customers better, build performance in our teams, and grow in a way that supports investment and attractive shareholder returns."

Doubtless the staff members who found themselves out of a job at the back end of this year are thrilled that their departure will help with those all-important shareholder payouts.

The market has not reacted particularly favourably to the move either. The telco's shares dropped on Monday morning, although at the time of writing had started to tick upwards, and are still below where they were ahead of the September announcement. That said, the impact of the operational changes will not be instant; the pattern of the telco's stock price from here on in will be the real test.

The new operating model, effective as of 1 December, will see Telia's five main country units (listed above) take responsibility and accountability for their own commercial planning and execution, and pursuing their own growth agenda.

To make that possible, Telia has moved IT, analytics, customer contact and strategy functions away from its central units to the country-based businesses. However, it has retained a central technology unit, as well as group functions – such as finance, communications, brand and so forth – albeit with altered scopes to reflect the new operating model.

The operator group also made all the right noises about the way the country businesses will work together and with the remaining central operations, talking up collaboration and efficiency, and other buzzwords. Clearly it feels the need to convince us that, in an industry in which scale is usually the name of the game, taking a country-level approach can still make sense.

It's tempting to speculate that Telia has plans afoot for separating its country businesses yet further, given that it has been on something of a divestment spree in recent years; it has shed Telia Carrier, its Danish operation, and some towers assets in the past three years.. Indeed, in late September, after the initial change programme announcement, CFO Eric Hageman drew attention to those asset sales and indicated that there could be more to come.

However, although it is setting up its country businesses to stand on their own feet, it seems unlikely that one of them will be on the block. Any sales from here will likely be infrastructure-based – the telco's copper network is one monetisation option, as are its rooftop sites.

The change programme is about the finances. Telia reiterated on Monday that despite the restructuring costs it will incur, its full-year outlook is unaffected. However, we will be watching its 2025 results announcements for evidence that this change is for the better.