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Stora Enso axes 300 jobs across Sweden

Stora Enso axes 300 jobs across Sweden

Published: 05 Feb 2013 14:08 GMT+01:00
Updated: 05 Feb 2013 14:08 GMT+01:00

In Kvarnsveden near Borlänge, central Sweden, 175 employees will be laid off.

Another 100 jobs will be lost in Hylte Bruk, while another 25 positions will disappear across the company's operations in Nymölla, Ala and Gruvön.

The aim is to cost cut by 54 million euros.

CEO Jouko Karvinen called the decision painful but necessary.

"We have to speed up our plans to reduce capacity in order to avoid having operations that either don't generate profit, or run at a loss," he said in a statement.

He announced that the company was closing down two newspaper mills, one at Kvarnshede, the other in Hylte Bruk.

"I can only apologize to our staff who have to go but ask for their understanding that we must respond to consumers' declining demand for printed news," Karvinen wrote.

The paper union reacted with sadness but also noted that demand is down.

"It is of course abysmal that our members should be affected by the cutbacks," Pappers union chairman Jan-Henrik Sandberg told the TT news agency.

"But newspaper production faces intense global competition and people read the papers less as they opt for tablet computers."

It is the second time in recent months that Stora Enso announced staff redundancies. In December, as the company reviewed its quarterly results, 520 employees were let go, half of whom worked in Sweden.

The waning demand for printed news was already then cited as the main reason.

"Demand is going down by 4 to 6 percent every year. When something goes digital it doesn't go back," CFO Karl-Henrik Sundström said at the time.

Stora Enso made a profit of 204 million euros in the final quarter of 2012, up from 110 million euro for the same period the year prior. Reuters had predicted fourth quarter earnings of about 232 million euros.

The board decided to retain its dividend payout on the company's shares at €0.30, the same as last year. Half of the profits will thus be paid out to shareholders, according to the TT news agency’s calculation.

The share price, meanwhile, fell by almost 3 percent on the Stockholm Stock Exchange upon news of the staff redundancies.

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