Nordic telecommunications operator Telia Company AB (TELIA.SK) will slash around 850 jobs this year as it continues to see a decline in demand for its high-margin fixed telephony and fixed broadband services, lower fiber installation revenue and increased operating expenses.
"The main impact will be in Sweden where the operational expenses are still too high," Chief Executive Johan Dennelind said.
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"We plan to reduce our total external and internal resources by roughly 850, around 3% of total resources. Of the resources reduced 650 are related to Sweden, equal to 8% of the Swedish resources."
Telia has around 21,000 employees.
The company said cuts are expected to lower costs in the second half of 2017 by 5% in Sweden year-on-year. Other measures to be taken over the medium term will drive further cost reductions of at least 3% in 2018, it said.
Mr. Dennelind said it is becoming more difficult to deliver on fiber demand, though the company's 1.9 million household target is still intact for the end of 2018. "We now start to reach the tail of the fiber roll-out potential. We struggle with permit and intermediary-related issues in connecting households to our fiber network. Some of the roll-out challenge is also related to shifts in the market dynamics, which have led to longer delivery processes."
The company fell to a second-quarter net loss for the period ending June 30 of 397 million Swedish kronor ($47.7 million) compared with a net profit of SEK1.44 billion in the same period last year. Earnings in the quarter were pressured by a loss from discontinued operations of SEK1.5 billion relating to impairment losses, write-downs and divestment losses.
Second-quarter revenue was SEK19.8 billion, down from SEK21.13 billion last year.
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(END) Dow Jones Newswires
July 20, 2017 04:51 ET (08:51 GMT)