TeliaSonera (News - Alert) AB, a Nordic telecommunications company with mobile services in Spain and in Nordic countries, as well as interests in central Asia, saw a dramatic decrease in its third quarter profits, down $723 million, or 1.2 percent from the previous quarter.
In response to this downward financial spiral, the company has decided to cut 7 percent of its staff, which will mean the loss of 2,000 jobs.
Despite the fact that TeliaSonera AB is the biggest phone company in Sweden, it is still experiencing a downward trend in profits, which CEO Lars Nyberg is determined to change. He stated that the company must “speed up the implementation of a new, sustainable business model to defend our revenue and deal with the increasing challenges that this industry is facing.”
Although most people would not consider the loss of 2,000 jobs a positive for anyone, the company included, Stockholm-based financial analyst Lars Soederfjell has assured the media that this is not the case, stating that it “increases chances of maintaining profitability” and that the cuts were “unexpected, but should be seen as a positive.”
Whether these jobs cuts will truly prove to save the company money is doubtful, as Bloomberg Businessweek noted that it has an incredibly productive workforce. The company has reported sales of $566,369 per employee in 2011, which is over $200,000 in sales per employee higher than Deutsche Telekom (News - Alert) AG and over $150,000 in sales per employee higher than France Telecom SA.
With such remarkable sales per employee, the loss of 2,000 jobs could prove to be disastrous, not beneficial, to its bottom line, as the firm loses the tremendous sales that each employee provided and as those employees find new jobs with competitors Deutsche Telekom AG and France Telecom (News - Alert) SA, increasing average sales per employee and making them stronger competitors.
Edited by Braden Becker