The recently merged Finnish-Swedish forestry products group, Stora Enso, announced in January 1999 that it would be cutting its workforce by 2,000 employees during the next few years, owing to the overlap resulting from the merger. The Finnish Paper Workers' Union expressed shock at the announcement and suggested that such decisions undermine Finland's current incomes policy agreement.
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The recently merged Finnish-Swedish forestry products group, Stora Enso, announced in January 1999 that it would be cutting its workforce by 2,000 employees during the next few years, owing to the overlap resulting from the merger. The Finnish Paper Workers' Union expressed shock at the announcement and suggested that such decisions undermine Finland's current incomes policy agreement.
The Finnish-Swedish forestry products (paper, pulp etc) group, Stora Enso, announced in January 1999 that it would be reducing its workforce by 2,000 employees over 1999-2002. In spring 1998, when the merger of the Swedish-owned Stora and the Finnish-owned Enso was made public (SE9809109N), it was estimated that the combined 40,000 workforce of the new group would be reduced by only 500 administrative and marketing employees. According to a press release, Stora Enso says that the difference between the earlier estimate and the newly announced redundancies is due to rationalisation in other parts of the company, largely as a consequence of "benchmarking" and applying best practices between the merged companies.
It is planned that the majority of the jobs deemed to be surplus to requirements will be eliminated by "natural wastage". The overlap between the Stora and Enso operations is now being reduced, which is improving the group's results: following the announcement of the new workforce cutback figures, Stora Enso's share price rocketed.
Stora Enso employees and trade unions in Sweden and Finland had hitherto reacted positively to the merger, the two enterprises having stated in connection with the merger that there would be no attempt to produce "synergy" effects through extensive personnel cutbacks. The new announcement has come as an unpleasant shock for the Finnish Paper Workers' Union (Paperiliitto). "The announcement of personnel cuts totalling 2,000 employees fits in badly with the positive spirit that has been shown by the employees and the Paper Workers' Union up till now. If the declaration is linked to an attempt to raise the share price, I consider this method dubious," stated the union's chair, Jarmo Lähteenmäki. According to Mr Lähteenmäki, such decisions are ruining the credibility of the current national incomes policy agreement (FI9801145F): "decisions like this one at Stora Enso strengthen the view of our union concerning the necessity for sector-level agreements during the next incomes policy round."
Eurofound recommends citing this publication in the following way.
Eurofound (1999), Stora Enso cuts 2,000 jobs, article.
