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Health care provider Pihlajalinna announces 180 job cuts

The private healthcare provider has been in co-determination talks with 2,400 employees since June.

Pihlajalinna Dextra toimipiste, Munkkivuori, Helsinki, 17.6.2019.
Losses had been expected to be as high as 400 when negotiations began in June. Image: Jari Kovalainen / Yle

Co-determination talks at Pihlajalinna, one of Finland's leading private social and health care providers, have concluded with the company announcing the loss of 180 jobs.

The majority of the cuts will be made via staff redundancies and retirements.

When negotiations between the company and staff began in June, job cuts were expected to be as high as 400.

"I am satisfied that during the co-determination negotiations with employee representatives we developed good interaction, with the end result that the maximum number of jobs were retained," Pihlajalinna Group CEO Joni Aaltonen said in a company press release.

The agreement will see the company concentrate its operations at its head office in Tampere, and will also merge offices in other locations. This streamlining of operations and reduction of costs is estimated to generate savings for the company of approximately 17 million euros.

Net sales expected to improve

Meanwhile, Pihlajalinna also published its interim report for the second quarter of this year. The group's adjusted operating profit increased to 2.1 million euros from April to June, up from 2 million euros a year ago. Net sales also rose, to 130 million euros from 125 million euros over the same period last year.

However, expenses also increased and Pihlajalinna did not reach its profit target.

"The group's administrative and personnel expenses were higher than planned and in some units the earnings before interest, taxes, depreciation and amortization remained negative. The group's operating result was in the red in April and May, while profitability in June was better," Aaltonen said in the press release.

Aaltonen said Pihlajalinna has not been able to exploit synergies in all units, so the profitability of different units in the service network varies considerably. Profits are however expected to increase with the acquisition of new contracts.

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