Metsä Group will start statutory negotiations to restructure the Nordic wood industry

 Friday, October 3, 2025

The global woodworking and forest-based products industry is bracing for significant changes as Finnish powerhouse Metsä Group initiates statutory negotiations across its entire business spectrum. This strategic move, part of a previously announced EUR 300 million profit improvement and cost-saving program, is primarily driven by challenging market conditions, and according to preliminary projections, could lead to a permanent reduction of up to 800 permanent positions worldwide. A substantial majority of these potential job losses, estimated at 540 roles, are projected to occur in Finland, the Group’s home base and a critical hub for the Nordic forest sector.

The comprehensive cost-saving plan, initially revealed on July 31, 2025, has now completed its planning phase, setting the stage for crucial discussions with employee representatives. This major organizational overhaul reflects a harsh reality for capital-intensive businesses operating in a volatile global economy.

The triple threat to profitability

Metsä Group’s President and CEO, Jussi Vanhanen, has identified a confluence of three major economic factors eroding the Group’s financial health:

1. Global trade uncertainty and weakened demand: Increased unpredictability in international commerce has directly suppressed demand for the Group’s diverse range of wood, pulp, and paperboard products. This aligns with broader market trends in 2025, where geopolitical tensions and protectionist trade policies have disrupted global supply chains and dampened customer purchasing behavior.
2. Adverse exchange rate movements: Fluctuations in currency exchange rates have created a sustained drag on the company’s financial results, a challenge particularly acute for international operators with global sales and multi-national operations.
3. Soaring operating costs: The twin pressures of escalating raw material costs—specifically northern wood, a core resource—and a general rise in the overall cost level have significantly squeezed profit margins. This phenomenon is impacting the wider Nordic woodworking sector, where companies are struggling to maintain competitive pricing against a backdrop of increasing input expenses.

Vanhanen noted that the combination of reduced utilisation rates due to market weakness and substantially higher operational costs has created an “unsustainable equation” that necessitates decisive action to safeguard long-term competitiveness.

The detailed cost savings initiative strategically targets areas with the highest potential for efficiency gains, with a strong emphasis on operational excellence. Key areas of focus include:

• Procurement and Logistics Optimisation: Streamlining the flow of goods and materials to reduce costs associated with sourcing and transportation, a critical move given the bulk nature of forest products.
• Wood Supply Chain Efficiency: Enhancing the entire chain, from the forest to the production units, to ensure a more efficient and cost-effective raw material supply. These two areas are anticipated to deliver a considerable share of the planned savings.
• Restructuring and Fixed Cost Reduction: Implementing organisational changes to streamline operations and permanently reduce fixed overheads.

While recognizing the high standard of work from the current staff, Vanhanen underscored the inescapable need to restructure to guarantee future viability. “We must tackle the things that are in our own hands and shape our operations to ensure long-term competitiveness,” he stated.

The human impact

The planned measures, while aimed at securing the Group’s future, carry a substantial human cost. The preliminary assessment indicates a reduction of 800 permanent roles globally from the Group’s total workforce of approximately 9,600 employees. The deepest impact will be felt in Finland, where 540 jobs—out of 5,600 Finnish employees—are currently under review. Beyond outright redundancies, the restructuring may also result in changes to existing employee duties.

The negotiations will proceed according to the specific labour laws and collective bargaining agreements of each country where the Group operates. It is important to note that the planned changes do not include the permanent closure of any production units, a factor that somewhat limits the operational impact but shifts the entire burden of cost reduction onto personnel and supply-chain efficiency. The planned reductions include positions within Metsä Board, a publicly listed company and part of the Metsä Group.

Despite the immediate necessity for cost-cutting, Metsä Group remains committed to its long-term strategy of bio-based innovation. Crucially, the development of new business projects focused on sustainable, high-value wood-based products will continue uninterrupted. These projects—which include Muoto (fibre packaging solutions), Kuura (wood-based textile fibre), lignin applications (as a replacement for fossil-based chemicals in concrete and other materials), and bio-based CO2​ capture—represent the company’s future-proofing efforts and its strategic pivot towards the growing bioeconomy sector.

Cost provisions related to the extensive profit improvement program are scheduled to be recorded in the company’s financial results for the final quarter of the year. This large-scale restructuring serves as a powerful indicator of the intense pressure currently facing the global forest and woodworking industry, highlighting the difficult balance between short-term financial demands and long-term sustainable growth.

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Tags: Finnish forest industry, Metsä Group restructuring, raw material costs, wood supply chain efficiency