1,150 fewer employees. As a result of these new measures and previous negotiations, Stora Enso will cut 1,150 jobs from its workforce of 21,000.
These measures are "absolutely necessary", said Annica Bresky, CEO of Stora Enso "improve long-term competitiveness and profitability" of the Group, whose sales rose by 14.9% in 2022 to â?¬11.7 billion, and which posted a 23.7% increase in earnings before interest and taxes (EBIT), with an EBIT margin of 16.2%.
600 jobs cut at four plants
The Finnish-Swedish group is planning to permanently shut down its Sunila pulp production unit in Finland, where the timber market has been impacted "through increased competition" and "stop wood imports from Russia" resulting in "significantly higher wood costs" . The planned closure, which would take place in the second half of 2023, would affect around 250 employees, and reduce Stora Enso's annual market pulp capacity by 13%.
Secondly, due to overcapacity in the European corrugated board market, the Group intends to shut down its corrugated board plant De Hoop in the Netherlands, acquired in January 2023 through the takeover of Dutch manufacturer De Jong Packaging Group as well as one of the four corrugated board lines at its OstroÅÄtmka site in Poland.
The Näpi sawmill in Estonia will also close, due to the lack of long-term raw material availability, rising timber costs and low profitability. These three closures, effective by the end of the year, affect some 350 employees.
300 job cuts at the Group's European offices
Stora Enso's plan also includes a reduction in the number of office staff in order to obtain "a more streamlined organization of Group functions with greater commercial focus and reduced overheads" . Around 1,300 employees are affected by the negotiations on Group functions, with a planned reduction this year of around 300 jobs in the Group's European offices.
250 job cuts in management and support functions
And in its Packaging Materials division, Stora Enso has just completed most of the negotiations leading to a reduction of around 250 positions in management and support functions over the 2023-2024 period.
This restructuring should lead to a fall in sales of around 380 million euros, with improved operating income of around 110 million euros.
"We're at a critical point in the progress of our strategy, and to strengthen our market position we need to focus more on capital allocation and decentralized empowerment, explained Annica Bresky, CEO of Stora Enso, in a press release. Unfortunately, this means that assets suffering from disputed profitability should be closed, in combination with a more streamlined headquarters organization."
