Terrafame concluded its change negotiations

Source: www.gulfoilandgas.com 4/5/2024, Location: Europe

In February 2024, Terrafame announced that it had decided to initiate a profitability programme, aiming to generate EUR 10 million in annual savings and to improve the company’s international competitiveness and profitability. As part of the profitability programme, Terrafame issued on 21 February 2024 an invitation to change negotiations concerning all personnel groups on production-related and financial grounds in accordance with the Finnish Co-operation Act. The negotiations affected Terrafame’s entire personnel, which is comprised of over 800 permanent employees.

The aim of the change negotiations between the company and the personnel was to find a solution for adjusting personnel resources, working time patterns and work arrangements to better meet Terrafame’s business needs. According to Terrafame’s initial estimate at the beginning of the negotiations, the maximum reduction need was in total 75 person-years. The possibility of layoffs was also considered in the negotiations.

As a result of the negotiations, Terrafame will make a reduction of 34 person-years, of which 27 are redundancies, on production-related and financials grounds as well as due to operational reorganization. Terrafame will offer those affected by the redundancies support in the change situation and in seeking re-employment.

During the change negotiations, Terrafame and the employee representatives also discovered other measures that will improve Terrafame’s profitability. The company estimates that the cash flow effect of the measures under the programme will amount to approximately EUR 10 million in 2024, of which the personnel reductions account for approximately EUR 1 million. From 2025, the annual cash flow impact is estimated to be in total EUR 10–14 million, of which the impact of the personnel-related measures is approximately EUR 2 million.

“The challenges that started to be seen in the electric vehicle market in 2023, especially in the Chinese market, have also affected Terrafame’s battery chemicals business. In addition, the company is currently implementing significant investment programmes, which are necessary for the continuation of its operations and particularly related to the construction of the new secondary leaching area. To ensure the cash flow required by these investments and financially sustainable business operations in the future, it is vital for Terrafame to initiate the profitability programme, even though it is extremely regrettable that we were also forced to decide on redundancies,” says Seppo Voutilainen, CEO of Terrafame.


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