Telia to cut 1,500 jobs in 2023, trims dividend

·2 min read

By Supantha Mukherjee and Anna Ringstrom

STOCKHOLM (Reuters) - Swedish telecom operator Telia Company on Thursday reported fourth-quarter core profit slightly below estimates, proposed a lower dividend and said it would cut 1,500 jobs this year, more than previously planned.

Shares of the company were down 3% in early trade.

Since 2021, Telia, which employs about 20,000 regular staff and consultants, has been reducing 1,000 positions every year as part of a restructuring plan to reduce costs.

"The vast majority of them is done in the first quarter so that we can benefit over the course of the fiscal year," Chief Executive Allison Kirkby said in an interview.

The company laid out plans in 2021 to slash billions of crowns in costs through 2025, including shedding staff, divesting assets and streamlining operations to boost growth. It has also been investing heavily in its 5G networks to get more customers for its services.

While doing this, Telia, which operates telecom networks in the Nordics and the Baltics, has also been increasing prices for its services.

"Pricing to date has not been a challenge in terms of customers over-reacting to being asked to pay more," Kirkby said. "We need to do more pricing (increase) going forward."

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 1% from a year earlier to 7.37 billion crowns ($722.61 million), slightly lower than the 7.39 billion expected by analysts.

Telia last week warned its fourth-quarter results would be hit by non-cash impairment charges totalling 19.8 billion crowns due mainly to higher interest rate costs.

For 2023, Telia forecast its service revenues would grow by a low single-digit percentage and that its adjusted EBITDA would be flat or grow in the low single digits, like-for-like.

It proposed a dividend of 2.00 crowns per share for 2022, down from 2.05 crowns the previous year.

(Reporting by Anna Ringstrom and Supantha Mukherjee; Editing by Terje Solsvik and Mark Potter)