Teleste announces potential layoffs as it moves to cut costs

Broadband network technology company Teleste has said it has entered negotiations that could lead to the layoff of up to 35 of its employees as a result of the impact of unfavourable market conditions.

The company said that it had commenced ‘change negotiations’ in line with Finland’s Act on Co-operation, that could lead to permanent layoffs, temporary layoffs, or part-time employment.

The company said that its planned measures were aimed at adjusting he cost structure of the common group functions and the Broadband Networks business unit to the current market situation, improving the company’s profitability and growth prospects in the longer term.

It said that the negotiations affect all personnel in all work locations in Finland. The estimated impact is maximum 35 permanent redundancies, as well as potential temporary lay-offs.

News of the potential layoffs comes after Teleste issued a profit warning and lowered its 2023 financial guidance in mid-December.

The company said at the time that it estimated net sales would amount to €145-152 million, down from €150-160 million and that the adjusted operating result would be €1-2 million, down from €2-3 million.

The profit warning came as business for the broadband networks division remained at a lower level than expected in the final quarter of the year.

Teleste said that customers’ additional orders have not been realized as expected, and some of the deliveries at the end of the year are moving to the beginning of 2024 due to delivery delays and material availability.

It targeted annual cost savings of up to €6 million due to the uncertain market situation, to be realized in phases from this quarter.