Norsk Hydro: Hydro cuts costs and carries out strategic workforce adjustment

Rhea-AI Summary

Norsk Hydro (NHYDY) has announced a significant cost-cutting initiative aimed at strengthening its long-term resilience. The company plans to reduce annual costs by NOK 1 billion through various measures, including a workforce reduction of 750 white-collar positions.

The workforce adjustment will be implemented in phases, with 600 positions to be reduced by the end of 2025 and an additional 150 positions to be identified through efficiency initiatives from 2026 onwards. The company has also reduced its capex estimate for 2025 from NOK 15 billion to NOK 13.5 billion.

The restructuring specifically targets white-collar roles in staff functions, engineering, commercial, supply chain, and IT departments, while blue-collar positions in production and maintenance remain unaffected.

Positive

• Cost reduction target of NOK 1 billion annually through strategic restructuring
• Proactive approach to address market volatility and geopolitical risks
• Reduced capital expenditure forecast for 2025 by NOK 1.5 billion
• Production and maintenance positions preserved, maintaining operational capacity

Negative

• Significant workforce reduction of 750 white-collar positions
• Potential impact on organizational capabilities in support and technical functions
• Implementation of cost-cutting measures indicates challenging business environment

To strengthen its long-term resilience, Hydro has decided to initiate a process aiming to cut annual costs by NOK 1 billion, including reducing the overall workforce by 750 positions.

Hydro is implementing measures to cut annual costs and align its organizational structure in accordance with strategic goals and changing business requirements. When completed, these measures, including reducing the overall workforce and initiatives to reduce travel costs and consultancy costs, are expected to provide an annual cost reduction of NOK 1 billion.

This measure comes in addition to the already communicated improvement program and reduction in the capex estimate for 2025 from NOK 15 billion to NOK 13.5 billion.

"By taking this step now, rather than later, we strengthen Hydro’s resilience and position ourselves to compete and succeed in a world where geopolitical unpredictability accelerates volatility and creates new risks," says President and CEO Eivind Kallevik.

Following the temporary hiring freeze implemented in June and the project to evaluate the number of white collar positions across the company, Hydro has decided to reduce the number of white collar employees by approximately 750 positions.

This workforce adjustment process will begin immediately and result in a reduction of 600 FTEs by year end 2025, with an additional 150 to be identified through efficiency initiatives from 2026 onwards. 

Hydro remains firmly committed to conducting this transition with transparency and care, ensuring close collaboration with employee representatives throughout the process. The company’s approach will be guided by its values of care, courage and collaboration.

The workforce adjustment affects white collar roles, like staff and support functions, engineering, commercial, supply chain, and IT across group functions, Business Areas, and Global Business Services. Blue collar positions, like production, maintenance and press operators within the Business Areas, are not affected by this process.

By implementing these measures, Hydro aims to further enhance its ability to navigate uncertainty and continue delivering long-term value to customers, employees, and stakeholders.

 

Investor contact:
Elitsa Blessi
+47 917 75 472
elitsa.blessi@hydro.com

Media contact:
Halvor Molland
+47 92979797
halvor.molland@hydro.com

This information is subject to the disclosure requirements pursuant to Section 5 -12 of the Norwegian Securities Trading Act and the Euronext Rule Book part II. 

FAQ

How many jobs will Norsk Hydro (NHYDY) cut in its latest restructuring plan?

Norsk Hydro will cut approximately 750 white-collar positions, with 600 positions to be reduced by end of 2025 and 150 more to be identified from 2026 onwards.

What is the expected annual cost savings from Norsk Hydro's 2025 restructuring?

The company expects to achieve NOK 1 billion in annual cost savings through workforce reduction and cuts in travel and consultancy costs.

Which departments will be affected by Norsk Hydro's 2025 job cuts?

The cuts will affect white-collar roles in staff and support functions, engineering, commercial, supply chain, and IT across group functions, Business Areas, and Global Business Services.

Will Norsk Hydro's production workers be affected by the 2025 job cuts?

No, blue-collar positions such as production, maintenance, and press operators within the Business Areas will not be affected by this workforce adjustment.

How much has Norsk Hydro reduced its 2025 capital expenditure forecast?

Norsk Hydro has reduced its 2025 capex estimate by NOK 1.5 billion, from NOK 15 billion to NOK 13.5 billion.