Neste implements performance-improvement program, completes global-change negotiations

As a part of implementing its performance-improvement program announced in February, Neste said April 7 that it has taken strategic decisions to focus on its core operations as well as to improve efficiency and profitability.

The company said it will streamline its development portfolio, global operations and organization on several fronts. 

The related global-change negotiations announced in February have now been completed, according to the company.

Neste said it will simplify its operating model and increase internal efficiency.

As part of the process, Neste is terminating 510 positions globally, 370 of which are in Finland.

With these changes, the company said it is targeting total annual cost savings of approximately 65-million euros (USD$71.3 million).

Neste added that it is offering its employees comprehensive support to help them adapt to the situation.

“Our current market environment is very challenging and financial performance unsatisfactory,” said Heikki Malinen, the president and CEO of Neste.

“While decisions that affect our employees are difficult, we must take action on many fronts to improve our profitability and cost-competitiveness of our operations,” Malinen said.

“We will support our employees in many different ways in this situation,” Malinen added.

With its performance-improvement program, Neste targets a total of 350-million euros (USD$383.9 million) of EBITDA run-rate improvement by the end of 2026, 250-million euros (USD$274.1 million) of which will be from operational costs.

The program focuses on commercial acceleration and supply-chain optimization, improved refinery performance and safety, external cost reduction, and operating-model simplification.