Type
Internal restructuring
Country
World
Region
Location of affected unit(s)
Sector
Manufacturing
Manufacture Of Wood And Paper Materials
Manufacture Of Paper And Paper Products
17.12 - Manufacture of paper and paperboard

1,000 jobs
Number of planned job losses
Job loss
Announcement Date
11 August 2006
Employment effect (start)
1 September 2006
Foreseen end date
31 August 2008

Description

Norske Skog is a world leading producer of newsprint and magazine paper, with 18 paper mills around the world. The group has about 13% of the world's market share for newsprint and 8% (of world's share) for magazine paper. The operating revenue in 2005 was approximately NOK 26 billion. The head office is just outside Oslo, Norway.

At a press conference on 11 August 2006 the new Chief Executive Christian Rynning-T√łnnesen announced the plans to cut of 1,000 jobs after its second-quarter net loss widened twenty-fold due to wide-scale restructuring. Most of the cuts, which will come within a two year period, will hit administrative staff but factory workers will also be affected, he said. It is still not clear which plants and countries will be most affected, but production cut in the mills in South Korea (1,100 employees today) was especially mentioned as demand for newsprint in South Korea has declined about 20% over the past four years, creating a need to reduce production capacity in that country. Rynning-T√łnnesen explained the need for downsizing by the wish to increase the profit on invested capital to 11% by the end of 2008. The last years this profit has been 3-4%.

The union representative and leader of the World Works Council, Kaare Leira, said the same day to the union magazine "Magasinet for fagorganiserte" that the unions agree that something has to be done, but they do not accept any downsizing figures at this moment. He added that the Board has not decided any specific numbers. The European Works Council and the World Works Council will use the weeks ahead to discuss the company's plans and the unions' response.


Sources

  • 11 August 2006: Magasinet for fagorganiserte
  • 11 August 2006: Aftenposten

Citation

Eurofound (2006), Norske Skog, Internal restructuring in World, factsheet number 63909, European Restructuring Monitor. Dublin, https://restructuringeventsprod.azurewebsites.net/restructuring-events/detail/63909.