TeliaSonera to cut 2,000 jobs as earnings fall

TeliaSonera will shed 2,000 workers as part of a 2 billion kronor ($300 million) savings package, the Swedish-Finnish telecoms giant announced on Wednesday along with its third quarter results.

TeliaSonera to cut 2,000 jobs as earnings fall

The job cuts are part of an effort to streamline TeliaSonera’s operations, CEO Lars Nyberg said in a statement.

“Our cost base is today growing at a higher rate than our revenues and we have to reverse this trend,” he said.

“We have spent the last months analyzing our operation in depth. The ambition is to fundamentally change our business by simplifying our way of working.”

According to Nyberg, the personnel reductions are expected to affect approximately 2,000 employees, or 7 percent of TeliaSonera’s total workforce.

However, he refused to say exactly when the cuts would occur or how many of the redundancies may affect workers in Sweden.

“We have most of our employees in Sweden, to that gives something of an indication, but I don’t want to speculate,” he told the TT news agency.

“We need to simplify our operations and question every possible thing.”

The news comes as TeliaSonera reported a 6.3 percent drop to 9.26 billion kronor in earnings excluding interest, taxes, depreciation, amortization and one-time items.

Net sales decreased 3.2 percent from 26.7 billion to 25.8 billion kronor, while pre-tax earnings for the third quarter landed at 6.61 billion kronor, down from 7.25 billion kronor in the corresponding quarter last year.

Analysts surveyed by the Reuters news agency had predicted pre-tax earnings of 6.74 billion kronor.

The group’s net profit fell by 1.2 percent to 4.8 billion kronor.

That compared to a 4.86 billion consensus by analysts polled by Dow Jones Newswires, which would have represented a 1.6-percent rise.

TeliaSonera stood by its full-year outlook but said it planned to cut costs after its mobile operations experienced “weakness in service revenues in many of our markets.”

But news of the job cuts came as a shock to TeliaSonera’s workers.

“It’s terrible,” Angeta Ahlström, chair of the Unionen Tele trade union, told the TT news agency of the job cuts.

Unionen Tele has about 3,800 members and is the largest union at TeliaSonera.

“This has dropped like a bomb. No one was prepared for it,” Ahlström added.

The report also made reference to an ongoing corruption probe into TeliaSonera’s 2007 investment in 3G licences in Uzbekistan.

Swedish current affairs programme Uppdrag Granskning claimed in September that TeliaSonera paid a bribe worth 2.2 billion kronor ($335 million) to Takilant to obtain a 3G mobile telephone licence and frequencies in Uzbekistan, as well as a 26-percent stake in the Uzbek company Ucell.

Takilant is a Gibraltar-based, one-woman company run by 22-year-old Gayane Avakyan, whose background is in fashion and who has close ties to the daughter of Uzbek President Islam Karimov, Gulnara Karimova.

On Monday, the Stockholm District Court froze $30 million in Takilant’s account at the Nordea bank while allegations of money-laundering are being investigated, it said.

“The allegations directed towards TeliaSonera are severe, although we are convinced that they are unfounded,” Nyberg said in a statement.

“To clarify the factual circumstances and ascertain whether there are any grounds for the allegations, TeliaSonera has initiated an external legal review, to be presented before the end of the year. The anticorruption unit of the Swedish Prosecuting Authorities has also initiated an investigation, which we welcome and will cooperate with.”

In midday trading, TeliaSonera shares were down by 1.5 percent on the Stockholm bourse, which was trading 0.2 percent lower.

<iThe Local/AFP

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Sweden slips in global corruption rankings

Sweden has dropped from third to fourth in an annual ranking comparing the levels of perceived corruption around the world.

Sweden slips in global corruption rankings
How corrupt is Sweden? Photo: Fredrik Sandberg/TT

Its Scandinavian neighbour Denmark shared first place with New Zealand in this year's Corruption Perception Index (CPI), released by anti-corruption campaign group Transparency International on Wednesday and ranking how corrupted countries were seen to be in 2016.

Both Denmark and New Zealand were given a score of 90 on the 0 to 100 scale (highly corrupt to very clean), followed closely by Finland and Sweden, which scored 89 and 88 respectively.

While still in the top-five of 176 countries, Sweden found itself pushed down one notch from last year and the group's Sweden office warned that this was no time to be complacent.

“Sweden's good performance in the 2016 index does not mean that we are spared from corruption in the public sector,” Ulla Andrén, chairwoman of Transparency International Sweden, said in a statement.

“Over the past year we have unfortunately seen how core values have wavered considerably. Leading figures have turned out to lack an ethical compass and corrupt behaviour has damaged trust in various public institutions.”

READ ALSO: Why Denmark is world's least corrupt country

Major Swedish institutions were rocked by scandals last year, including claims of cronyism and cover-ups at the state auditor Riksrevisionen and tax agency Skatteverket. Some of the country's largest businesses, such as Telia and Ericsson, have also faced allegations of illicit payouts.

“We believe that everything colloquially referred to as cronyism is corruption,” Lotta Rydström, executive secretary of Transparency International Sweden, told The Local.

“Transparency International's definition of corruption is wider than just bribes: 'Corruption is abuse of entrusted power for personal gain', which includes nepotism, buddy contracts and so on.”

“I would probably also say that several bribe-related incidents in the business world have shown that Sweden is not as spared (from corruption) as many think,” she said.

Rydström warned that the corruption index does not cover local and regional councils, where much of the political decisions are made in Sweden. Municipalities and county councils make up around 70 percent of public administration in the country.

“A high rating does not mean that we can beat our chest and say we are still almost the best student in the classroom. Good can get better and there is plenty to work on. Public procurement, municipal auditing and whistleblower protection are some of the issues we are working on.”

As a whole, Transparency International said that no nation in the world – Sweden included – is doing enough to fight corruption.

“There are no drastic changes in Europe and Central Asia in the Corruption Perceptions Index 2016, with only a few exceptions. However, this does not mean that the region is immune from corruption. The stagnation does not indicate that the fight against corruption has improved, but quite the opposite,” it wrote in the report.