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SCA to slash 1,500 jobs in cost-cutting bid

SCA to slash 1,500 jobs in cost-cutting bid

Published: 05 Nov 2012 12:10 GMT+01:00
Updated: 05 Nov 2012 12:10 GMT+01:00

Swedish hygiene and forestry products company SCA (Svenska Cellulosa Aktiebolaget) is cutting 1,500 jobs in a bid to save billions of kronor, the company revealed in Stockholm on Monday.

“A new efficiency programme has been initiated within the hygiene operations to further reduce costs and increase productivity," SCA President and CEO Jan Johansson said in a statement.

"It will provide annual cost savings of some €300 million, with full impact in 2015. About 1,500 employees are affected and costs are expected to amount to €100 million."

Spokesman for SCA, Petter Tiger, wasn’t able to say exactly where the cuts would be made:

“We will be looking at every division,” Tiger told the TT news agency, without being able to disclose how many of the company’s workers in Sweden will be affected.

Currently SCA has some 37,000 employees. The 1,500 redundancies in the hygiene operations mean that 4 percent of the overall work force will be cut.

26,000 of the 37,000 employees are currently working within hygiene product manufacturing. It is still unclear how many of the redundancies will affect workers in Sweden.

The cuts in the hygiene operations are made despite strong third quarter sales, profits and profitability.

Since launching the efficiency programme in 2011, the company has achieved more than half of the expected annual savings of €80 million.

During the past year, SCA completed a number of major acquisitions and divestments. The hygiene operations currently account for 80 percent of SCA’s sales, with the majority in Europe.

The company nevertheless plans to retain its previous targets of a 13 percent return on capital employed over a business cycle, a debt/equity ratio of 0.70 and a debt-payment capacity of 35 percent.

The dividend policy is to pay out one-third of cash flow from current operations, the company said.

Founded in 1929 by Swedish industrialist Ivar Kreuger, better known as the "Match King", SCA is one of the world's largest forestry and packing products firms, as well as Europe's largest private owner of forest land.

TT/Rebecca Martin

twitter.com/thelocalsweden

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Your comments about this article

14:03 November 5, 2012 by Grokh
great, its funny when the crisis first hit everyone said "people need to spend".

but since most countries if not all have huge income inequality, the idea started going for cuts and savings.

meaning more ppl lose their jobs, and less people consume.

capitalism cant work if everyone is saving money and firing employees.

if only producers of goods have money and they cut their work force more and more, who the hell will buy the crap they make?
09:32 November 8, 2012 by smilingjack
too much profit is never enough. in the world of capitalism its go forward or be taken over. Its inevitable that every major company in the world will be owned by just a few. Apple and Samsung have already seen to the demise of Sony, Panasonic and Sharp who are just about finished. Apple is spending a squillion a year trying to destroy Samsung ( gratefully this wont happen ). Apple has also said they have enough cash to buy the rights to every piece of media in the world. Can you imagine a world where everything you watch and listen to is via Fox and Apple.

I agree capitalism cant work without consumers. But in the bigger picture its destroy your competition first. Even if that involves killing millions of civilians ( sorry terrorists ).
10:35 November 11, 2012 by spacecowboy
Cutting jobs to cut costs, but at the same time SCA is sponsoring a volvo ocean race team to the tune of 15 million Euros!

http://www.vsail.info/2012/11/02/richard-brisius-manager-of-first-volvo-ocean-race-entry-team-sca-talks-to-vsail-info-part-ii/

Nice, good to see they have their priorities in order!
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