Finnish forestry firm Stora Enso said it could lay off about 1,000 employees as part of a restructuring plan aimed at boosting profits and competitiveness after its earnings slumped in the fourth quarter.
The planned job cuts add to the more than 1,000 layoffs the company announced last year when it decided to shut down several plants across Europe.
"We are facing persistent weakness in the macroeconomic and geopolitical environment and need to focus on core business activities which align with our strategy," CEO Hans Sohlström said in a statement.
High Cost Inflation
The continuous impact of high cost inflation, destocking among customers and subdued pulp demand hit the Finnish forestry industry in 2023, leading to a slump in results and low visibility for the coming quarters.
Stora Enso reported a 86% drop in quarterly operational earnings before interest and taxes to €51 million ($55 million), compared with €42 million expected by analysts in a company-provided poll.
In the fourth quarter sales decreased by 24% to €2.1 billion, while operational EBIT decreased to €51 million.
Outlook FY 2024
The company expects market conditions to remain uncertain in 2024, with ongoing pressure on demand, prices and margins.
It does not foresee see significant market improvement in the first quarter following its fourth quarter performance and slow recovery.
Sohlström added, "Despite ongoing market volatility, we see some signs of normalisation and expect a higher operational EBIT in 2024 than in 2023, supported by our cost reduction and growth initiatives."
The company added that its consumer board investment at the Oulu site in Finland is moving ahead according to schedule, with production expected to commence in 2025.
News by Reuters, additional reporting by ESM.
