1. Hydro will cut costs by NOK 1 billion, reducing workforce by 750. 2. Workforce cuts will ensure strategic alignment with business goals. 3. Capex estimates for 2025 reduced from NOK 15 billion to NOK 13.5 billion. 4. The company aims to navigate geopolitical risks effectively. 5. White collar roles affected; blue collar positions remain secure.
Cost-cutting measures often lead to improved profitability, as seen in similar companies like Alcoa and Rio Tinto after restructuring efforts, enhancing investor confidence and driving stock prices upwards.
The restructuring and cost reduction strategy can significantly enhance Hydro's operational efficiency, positively influencing NHYDY’s market performance amidst an uncertain economic landscape.
While immediate impacts may be evident, the long-term benefits from strategic cost reductions will likely position Hydro for better profitability and stability over time, reminiscent of past restructuring success stories.
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.
