Slow-Recovering Economy, Imports Cause Stora Enso NA to Cut Jobs

Published: September 04, 2003, By PRESS RELEASE

HELSINKI, FINLAND—Late last month, Stora Enso North America announced it will implement a USD 65 million (EUR 60 million) reduction in annual fixed costs. According to the Finland-based company, the cuts are an extension of a profit-enhancement program announced a year earlier. Stora says the new program includes a reduction in Stora Enso NA's total workforce of about 12%, or 700 employees by mid 2005, which the company adds, by then, the program "will have its full financial impact and will increase the profit per share by EUR 0.04 on top of the EUR 0.05 increase from the earlier program."

Stora says, in addition, 350 of the reductions in the August 2002-announced profit-enhancement program remain to be implemented. Stora Enso NA currently employs approximately 6,050 people, and once it's fully implemented, it reports, the number of employees will be around 5,000.

According to the company, factors contributing to the need for these measures include: a lagging and slow-recovering economy ; increased competition from lower-priced imports; higher energy costs; and higher production and labor costs. "Sales prices for paper products in North America continue to be at historic lows," states Stora's press release about the cutbacks.

Stora Enso is playing no favorites, stressing that every facility and support group within the North American division is included in the current cost-reduction effort. "The reductions in both the salaried and hourly workforce will be implemented consistent with the needs of each facility to ensure a safe workplace and quality production," Stora states.

The reductions, which have already begun, will be made in a number of ways, including severance, retirement and attrition, and will be carried out in accordance with applicable collective bargaining agreements, adds co.

Learn more about Stora Enso at storaenso.com.