Telia to cut headcount by 3000 this year

The operator says the cuts will have a proportionally lower impact on country units, and will result in expected annual savings of at least SEK 2.6 billion. It’s being pitched as a move to reset the company’s cost base and simplify its operations, by implementing a new operating model with ‘streamlined processes and improved ways of working.’

It plans to decentralise and move part of the ‘competence’ – by which it presumably means people – from common to country units. The latter will be able to ‘better serve customers and capture growth based on local market needs,’ it claims, as well as reduce overlaps and simplify day-to-day operations.

The remaining part of the ‘common technology and product unit’ will retain expertise in IT, networks and product management, we’re told, ‘allowing Telia to continue to benefit from economies of scale where relevant.’

Telia is also restructuring its vendor financing program, reducing its volume by approximately 50% during the second half of the year. “The new portfolio structure aims to better serve Telia and its suppliers in the current macroeconomic environment and brings the size of the program closer to the wider industry levels,” explains the release, and the restructuring is estimated to result in reduced cash flow volatility over time.

“This is a tough decision, but one that is necessary to ensure the long-term success of Telia,” said Patrik Hofbauer, Telia Company President and CEO. “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.

“I envisage that this intended approach will not only result in a Telia that is simpler and faster in decision-making and commercial execution, but also help us to grow our business and generate enough cash so that we can make necessary investments and cover our dividend, as we remain committed to our dividend policy. While we will support the employees who will eventually leave Telia, we will also make this company a better place to work for those employees who remain with us.”

So essentially it sounds like Telia is talking about decentralising its structure and distributing responsibilities to more local business units, which it thinks will be more efficient. It’s all subject to union negotiations, and the estimated restructuring charges approximately SEK 1.4 billion in H2 2024 are not expected to impact Telia’s full-year financial outlook statements for 2024.