Telia Company has embarked on significant changes aimed at reshaping its operational model and enhancing its competitiveness. This transformation culminated on December 1, 2024, with the completion of a change program aimed at streamlining costs and decentralizing key functions.
The restructuring plan, which first came to light on September 4, 2024, involved tough decisions, including the elimination of 3,000 jobs. This move, albeit difficult, is part of Telia's strategy to create what President and CEO, Patrik Hofbauer, describes as "a Telia fit for the future." He emphasizes the company's commitment to improving commercial excellence and fostering profitable growth.
Hofbauer noted, "Millions of people rely on our networks and services every day, so we have many unique strengths on which to build. We have made tough but necessary changes, and our employees’ dedication during this time has been exceptional." Through these organizational changes, Telia aims to deliver annual savings of at least SEK 2.6 billion - about $264 million. This aggressive restructuring is also anticipated to bolster the company's appeal to customers, investors, and employees alike.
Decentralization is perhaps the most significant aspect of this transformation. From December 1, country units across Sweden, Finland, Norway, Lithuania, and Estonia were entrusted with primary responsibilities for commercial planning and execution. The idea behind this shift is to allow these units to adapt more swiftly to local market conditions, thereby driving growth and enhancing customer satisfaction.
Key capabilities, such as IT, analytics, products, and strategy, have transitioned from central units to these decentralized country units. This is not to say, though, the company has abandoned its centralized expertise; Telia retains pivotal functions under its strategic Technology unit and Group functions like Finance and Corporate Affairs to maintain operational efficiency and collaboration.
The restructuring has not come without its costs. Telia anticipates recording restructuring charges of approximately SEK 1.3 billion, slightly below the former estimate of SEK 1.4 billion. Despite the financial weight of these adjustments, the company’s leadership believes they are necessary investments for future growth.
"Through our new operating model, we can serve customers even more effectively, build performance within our teams, and grow sustainably to support investment and attractive returns for our shareholders," added Hofbauer. His sentiments reflect Telia's focus on maintaining operational scale without sacrificing the agility needed to compete effectively within the fast-evolving telecommunications sector.
The changes put forth by Telia mirror broader trends occurring within the telecommunications industry, which has seen many players grappling with the need for adaptation amid rapidly changing technologies and market demands. The capacity for prompt decision-making and response to customer needs is increasingly seen as pivotal to maintaining competitive advantage.
Other aspects contributing to the restructuring's focus include cost management as the industry navigates rising operational costs and margin pressures. By streamlining its organizational structure and reallocations of responsibility, Telia seeks to drive efficiencies and invest more strategically as it prepares for the future.
Telia's comprehensive change initiative arrives at a time when the telecommunications industry faces intense competition and increasing customer demands for innovative solutions and seamless services. An agile and responsive operational model is now deemed indispensable for success.
Beginning from the organizational basis of service delivery to customer engagement, every facet of Telia’s operations is being fine-tuned under this new decentralized model. The hope is, by shifting decision-making closer to the market, Telia can respond faster to consumer preferences and trends - effectively allowing it to thrive amid fierce competition.
Telia’s major restructuring chiefly aims at fortifying the company's long-term future and reinforcing its position as one of the leading telecommunications providers. With its substantial cost-saving measures and renewed focus on local market dynamics, Telia is setting the stage for sustainable growth and innovation.
Looking forward, the firm’s investments, alongside maintaining operational effectiveness, could offer it the resilience needed to weather market fluctuations. By ensuring employees are aligned with the new model and sufficiently trained for their new roles, Telia plans not only to adapt but to excel.
Such ambitious endeavors are all part of Hofbauer’s vision for Telia, aimed at fostering transparency and communication with stakeholders. The sensitive nature of job cuts and restructuring initiatives typically garners attention, and Telia appears committed to managing this process with care.
While Telia’s ambitious plan draws attention for its scale and scope, the core of its restructuring revolves around improving customer experience and ensuring solid financial health. The dual focus on cost management and decentralized responsiveness places Telia on firmer footing as it walks the winding road of telecommunications futures.
