Stora Enso to cut more jobs

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Due to the continued weak and uncertain market environment, pulp, paper, board and packaging producer Stora Enso is planning a new programme with the aim of improving operating Ebit by 80 million euro annually.

This could lead to a possible reduction of around 1,000 jobs, but is to be implemented without closing any production sites. The majority of the savings would be realised in the course of 2025, and the largest part of the headcount reduction is to take place in the first half of 2024. The headcount reductions, efficiency improvements and synergy opportunities would impact all business areas and Group functions, reflecting the size of the respective organisations. Decisions on the planned headcount reduction will only be made once negotiations on the job cuts have been finalised in accordance with local regulations.

“2023 was a challenging year for the whole industry, with lower demand and volumes in general” says Stora Enso’s President and Ceo, Hans Sohlström. “During the year, we experienced a decline with a speed and magnitude not seen for a couple of decades, with deteriorating market conditions and price pressure for all segments. A restructuring programme was initiated in June 2023 to strengthen the Group’s long-term competitiveness, improve profitability and focus capital allocation on strategic growth markets. We closed several production units with low long-term competitiveness. The restructuring actions will improve our operational EBIT by approximately EUR 110 million annually and affected approximately 1,150 employees. Last year’s restructuring programme initiated in June 2023 identified synergy opportunities. In February of this year, 2024, we initiated a profit improvement programme resulting from those findings. Our strategy yielded significant progress in 2023. We began the year by discontinuing our Paper division, which had been in a market-related structural decline for many years. Instead, we focused on growing in our key areas, most notably renewable packaging, our largest growth area. In January, we completed the acquisition of De Jong Packaging Group, a leading corrugated packaging producer in the Netherlands, which reinforced our position in West Europe. Furthermore, we continued converting a paper line into growing consumer board segments at our Oulu production site in Finland, with production set to commence in early 2025. We still expect the market conditions to remain challenging and uncertain in 2024, with continued pressure on demand, prices, and margins. However, we also see some signs of improvement, such as improving pulp market and normalisation of customer inventory levels across our main business segments. We will continue to focus on our profit and cash generation, commercial and operational excellence, enhancing our competitiveness and increasing shareholder value.”