
- Swedish telco is axing up to 700 staff to cut costs and boost margins
- The move reflects the growing influence of Xavier Niel’s Iliad Group on the telco’s strategy
- News of the ‘deep transformation’ comes as Tele2 reports slight increases in revenues and earnings for the full year 2024
Signalling the growing influence of shareholder Iliad Group, and following a shakeup of its management team in recent months, European operator Tele2 has announced plans to reduce its total headcount by 15%, equivalent to between 600 and 700 full-time employees, as part of a “deep transformation to improve profitability in 2025”.
The operator, which has operations in Sweden, Estonia, Latvia and Lithuania, has taken a number of major personnel decisions since Xavier Niel’s Iliad Group acquired a near 20% stake in Tele2 in February 2024.
In April, Iliad Group’s CEO, Thomas Raynaud, was named as Tele2’s chairman and was joined on the board by two other Iliad executives, including Jean Marc Harion, who was parachuted in as Tele2’s new CEO in early November last year.
Since then, the operator’s CTIO was replaced in late November, while the executive VP of people and change, Jenny Garneij, and the company’s chief operations officer, Kim Hagberg (who had been a member of Tele2’s executive management team for more than five years) left the operator “with immediate effect” in consecutive weeks in early January.
Now the company’s total group workforce is set to shrink to below 4,000, subject to union negotiations, to help the company with what Harion referred to on the company’s earnings webcast as its “main priority – to improve profitability”.
This will be achieved by an “extensive cost optimisation [initiative] that is already in motion… By the end of 2025, we will have simplified drastically our operating model and organisation by getting rid of the complexity inherited from legacy and integration… and improved the profitability of all parts of our business,” stated the CEO.
In prepared remarks included in the operator’s earnings press release, Harion noted: “There is an untapped potential in the company, and we must unleash it. We will reduce complexity, reinforce cost discipline and carefully select investments to focus on those that make a real difference for our customers. Our organisation will undergo significant changes during 2025. This will be a challenging time for all our colleagues, especially those directly affected by the reorganisation. Myself and all Tele2 leaders carry a great responsibility in the coming months to ensure that this process is as transparent, respectful and supportive as possible. These changes are, however, necessary to make Tele2 a faster and more agile company, better equipped to swiftly capture market opportunities.”
In 2024, Tele2 generated total group revenues of almost 29.6bn Swedish krona (SEK) ($2.69bn), up by 1.8% from 2023. That total included SEK21.8bn ($1.98bn) in end-user service revenues, up by 3.3% year on year.
Earnings before taxes and other financial measures (EBITDAaL) for the full year was up by 2% to SEK10.6bn ($962m), while capex came in at just over SEK4bn ($363m), equivalent to about 14% of total revenues.
The operator’s board has proposed a 2024 dividend of SEK6.35 per share, “equivalent to 100% of 2024 equity free cash flow,” which came in at SEK4.38bn ($398m). News of that dividend plus the cost-cutting plans sent Tele2’s share price up by 5.9% to SEK122 on the Stockholm exchange, about 40% higher than when Iliad acquired its stake.
For 2025, Tele2 expects low single-digit growth in end user service revenues and mid-to-high single-digit growth in EBITDAaL, while capex costs are expected to equate to about 13% of total revenues.
“We will concentrate our network investments on securing our 5G rollout, which accounts for about one-third of our capex, and prepare for our 2G and 3G closure,” noted the CEO during the earnings webcast.
In 2024, Tele2 completed a network upgrade that resulted in its 5G network covering 90% of Sweden’s population: The telco also simplified its back-office technology platforms, migrating from six IT stacks to just two to support all of its brands. By the end of 2025, the operator is aiming to reach more than 99% of Sweden’s population with its 5G services.
Tele2 ended 2024 with 2.8 million consumer mobile customers and 1 million business mobile customers in its main market, Sweden, where it also had 957,000 fixed broadband and 796,000 digital TV customers. In Lithuania, it has 2 million mobile customers, just over 1 million in Latvia, and 461,000 in Estonia, giving it more than 7.2 million mobile customers across its group operations.
- Ray Le Maistre, Editorial Director, TelecomTV
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