A total of 650 jobs are to go in Finland and while the company will not speculate on the scale of losses in Sweden where cutting workforces is a more difficult operations, the speculation in the local media is that 2,000 employees will leave the company.
In total the company, a rare product of the merger in 2002 of the incumbents in two countries, will cuts its 29,000 workforce by almost 10%.
With the migration from fixed to mobile communications and pricing pressures that in Finland alone have cuts mobile calls costs by 30% and broadband access by 50%, TeliaSonera says that the outlook for revenue growth in 2005 will be limited, though in the longer term it hopes that market growth will return to higher levels.
The warning signs are clear in its full year figures. In the fourth quarter to December 31, net income was 22.4% down at SEK 21.4bn ($296m) on revenue 0.9% higher at SEK 21.3bn ($3bn). For the year net income rose 69% to SEK 12.9bn ($1.8bn) on revenue 0.9% higher at SEK 21.2bn ($11.6bn).
TeliaSonera, whose tentacles extend as far as Russia and Turkey, says it has a customer base of 63 million when all the companies where it has an interest are taken into account. But its main focus is on driving down costs in its core Swedish and Finnish operations and realising the synergies from the merger.
It claims that synergies so far realised amount to an annual run rate of SEK 1.8bn ($261.3bn) by the end of 2004 and it plans to increase this to SEK 2.4bn ($345.2m).
It plans to introduce a shared IT tool to handle the entire process from sales to delivery, service and invoicing of products and services, initially in Finland and Sweden. Shared products are also to be introduced for traffic billing, IP network protection and mobile email with a push function.
The restructuring program will hit operating income this year but the company claims that it will yield substantial cost reductions during the latter part of the three-year transition period.
