Teleste withdraws financial guidance and begins talks for temporary lay-off of all staff

Cable technology provider Teleste has withdrawn its financial guidance for the current year due to the potential impact of the Coronavirus crisis on its business and has begun “co-determination negotiations”, in accordance with the Finnish Act on Co-operation within Undertakings, that would permit it to temporarily lay off its entire staff.

Teleste said that the negotiations on possible temporary layoffs concern the company’s entire personnel, approximately 500 employees, in Teleste Oyj and Teleste Information Solutions Oy in Finland and will last for a maximum of 90 days.

Corresponding adapting measures will also be implemented in Teleste’s international units if necessary.

Teleste said that the measures are planned to be implemented in different business units in different phases based on their situation. The agreed actions are designed to adapt Teleste’s operations to the difficult-to-predict market situation without compromising its favourable growth potential, it said.

Withdrawing guidance, Teleste said that while network capacity remains at a premium during the crisis, Teleste said that restrictions on the daily functioning of society would have a negative impact on its results.

The company said it was consequently withdrawing the guidance it published in mid-February and would update its outlook when visibility improved.

“The burden on broadband networks has increased during the pandemic, but we estimate that, in order to ensure the smooth functioning of broadband services critical to society, network upgrades will be postponed to some extent. In addition, regulations imposed by the authorities restrict the performance of field services in certain markets,” said Jukka Rinnevaara, president and CEO of Teleste.

“The order backlog of video security and information solutions is record-high, but the global crisis caused by the COVID-19 pandemic will delay some customer projects and endanger the availability of certain critical components, which is estimated to have a negative impact on net sales.

“Until now, the impacts of the COVID-19 pandemic on the demand for Teleste’s products and the company’s ability to deliver have been limited. However, the situation is changing day by day. Effects on the services business can be substantial. If they are prolonged, the restrictions will have a negative impact on the company’s net sales and profitability.”