Valmet to initiate temporary layoffs in Finland amid continued pressure on packaging and paper demand

Valmet Corporation has announced plans to begin change negotiations in Finland on November 10, 2025, under the Finnish Co-operation Act. These negotiations will focus on implementing temporary layoffs across its Packaging and Paper business area and the Global Supply unit. The decision impacts more than 950 employees based in the Finnish cities of Jyväskylä, Tikkurila in Vantaa, and Raisio. Valmet Corporation stated that the objective is to align its operational capacity with prevailing market conditions and improve cost efficiency in specific business lines that continue to face demand uncertainty.

The planned layoffs are expected to be temporary in nature and are scheduled to be implemented progressively during the first half of 2026. These measures follow previous rounds of restructuring in 2023 and early 2024, highlighting the recurring need for capacity adjustments in Valmet Corporation’s packaging, pulp, and paper operations as customer investment cycles shift. The Packaging and Paper business area is part of the Biomaterial Solutions and Services segment, while the Global Supply unit was established to streamline manufacturing, procurement, and logistics processes across the same segment.

What business units and workforce groups are impacted by the temporary workforce reduction plans?

Valmet Corporation confirmed that the temporary layoffs will affect all employee groups within the Packaging and Paper Machines business unit and the machine workshop and foundry operations of the P&P Manufacturing unit in Jyväskylä. Both of these are critical components of the Biomaterial Solutions and Services segment and the centralized Global Supply organization.

The company emphasized that specific details around the duration and scope of the layoffs will be finalized through the co-operation negotiations. However, the overall scale reflects ongoing challenges in the packaging and paper machinery business, which has been under pressure from both market softness and project-specific delays.

In its third-quarter 2025 update, Valmet Corporation reported that Packaging and Paper orders dropped by 7 percent year over year to EUR 306 million, while net sales declined sharply by 19 percent in the same subsegment. This contraction in order intake and revenue has been a major contributor to the capacity mismatch and labor surplus currently faced by the organization.

How is market softness in the biomaterials segment shaping Valmet Corporation’s workforce actions?

The decision to initiate temporary layoffs comes at a time when the Biomaterial Solutions and Services segment is experiencing divergent performance across its business areas. While the Tissue unit delivered robust order growth and margin expansion, the Packaging and Paper and Pulp, Energy and Circularity units showed a clear slowdown.

According to the company’s Q3 2025 interim review, the overall segment recorded a 12 percent year-over-year decline in comparable EBITA, falling to EUR 89 million, and a margin contraction to 9.5 percent compared to 10.7 percent during the same period in 2024. These trends point to persistent pressure on project margins, particularly in equipment-heavy units like Packaging and Paper, where cost pass-through has become increasingly difficult amid tough global competition.

Despite implementing elements of its new operating model and realizing EUR 15 million in early savings during the third quarter, Valmet Corporation has not seen a corresponding recovery in the segment’s profitability. This operational misalignment has made short-term labor adjustments an immediate cost lever while the company pursues further procurement and delivery chain optimizations through the Global Supply unit.

What is the financial and strategic backdrop behind these temporary layoffs?

Valmet Corporation’s broader cost management strategy is anchored in its “Lead the Way” initiative, launched earlier in 2025. This program is designed to simplify the operating model, reduce overheads, and focus strategic investments on profitable and scalable areas of the business. The company has set a target of EUR 80 million in annualized savings to be realized by early 2026, and the latest layoffs are part of this trajectory.

Valmet Corporation’s overall financial performance remains resilient. Group-level comparable EBITA for Q3 2025 stood at EUR 159 million, with a margin of 12.3 percent, flat compared to the previous year. Orders received rose organically by 7 percent to EUR 1.08 billion during the quarter, driven by strong momentum in the Process Performance Solutions segment. Net sales remained stable at EUR 1.295 billion. However, within the Biomaterial Solutions and Services segment, net sales fell 1 percent and margins were compressed despite efforts to integrate cost savings from earlier restructuring moves.

The company’s backlog as of September 30, 2025, was EUR 4.5 billion, representing a 28 percent increase compared to the previous year. However, 85 percent of this backlog is concentrated in the Biomaterial Solutions and Services segment, where execution timelines are long and subject to customer capital investment cycles. This concentration elevates Valmet Corporation’s exposure to project delays, contract variability, and shifting order volumes, particularly in paper and pulp machinery systems.

How are analysts and institutional investors reacting to Valmet Corporation’s cost control strategy?

Institutional investors appear to have endorsed Valmet Corporation’s proactive approach to labor management and operational simplification. Share price performance supports this view, with the stock closing at EUR 28.28 on September 30, 2025, up 21 percent since the end of 2024. The company has maintained a solid liquidity position with EUR 479 million in cash and a net debt-to-EBITDA ratio of 1.50, providing confidence in its ability to withstand market turbulence without resorting to structural downsizing.

Analysts have pointed to the company’s strong delivery on margin expectations in Process Performance Solutions, where Q3 comparable EBITA grew 22 percent year over year, with a segment margin of 21.9 percent. The challenge remains centered in the Biomaterial Solutions and Services segment, particularly Packaging and Paper, where declining unit economics and lower capacity utilization are forcing repeated cost realignments.

While the layoffs may raise concerns among the Finnish workforce and unions, investor sentiment reflects a pragmatic view that temporary actions are necessary to preserve competitiveness in cyclical businesses. The success of the Global Supply unit, which aims to deliver EUR 100 million in efficiencies by 2030, will be closely monitored in the coming quarters as a leading indicator of whether Valmet Corporation can structurally improve margins in its largest segment.

What lies ahead for Valmet Corporation’s employees and strategic cost base?

Looking ahead, Valmet Corporation’s management has reiterated that these layoffs are temporary and reversible, depending on how demand trends evolve in early 2026. The Finnish industrial technology company expects its simplified operating model and focused segment alignment to drive greater cost predictability, especially as customer orders become increasingly tied to energy efficiency and circularity mandates.

As of the end of September 2025, Valmet Corporation employed 18,842 people worldwide, with about 6,000 based in Finland. Personnel headcount was down 3 percent year on year, reflecting the impact of earlier restructuring phases. The upcoming layoffs are unlikely to alter this trajectory materially but could deliver short-term relief as the company navigates continued uncertainty in customer project pipelines.

In the longer term, the company’s performance will depend on its ability to sustain automation-driven margin gains in Process Performance Solutions while rebalancing cost structures in the capital-intensive biomaterials sector. Valmet Corporation’s 2030 targets include reaching a 15 percent comparable EBITA margin and 20 percent return on capital employed before taxes. Progress toward these goals will hinge on how effectively it can absorb short-term volatility without compromising its growth vision in industrial decarbonization and circular manufacturing.

What are the key takeaways from Valmet Corporation’s temporary layoff announcement in Finland?

• Valmet Corporation will begin co-operation negotiations on November 10, 2025, targeting temporary layoffs of more than 950 employees across its Packaging and Paper business area and Global Supply unit in Finland.
• The layoffs, planned for implementation in the first half of 2026, are designed to align operational capacity with softening demand in the Biomaterial Solutions and Services segment.
• The majority of affected employees are located in Jyväskylä, Tikkurila in Vantaa, and Raisio, with all employee groups included in the scope of negotiations.
• In Q3 2025, Packaging and Paper orders declined 7 percent year-over-year, and net sales dropped 19 percent, highlighting continued project-level weakness and margin pressure.
• Valmet Corporation’s Biomaterial Solutions and Services segment recorded a 12 percent decline in comparable EBITA in Q3 2025, with segment margins narrowing to 9.5 percent.
• The temporary layoffs follow similar workforce adjustments made in 2023 and early 2024 as part of the company’s broader “Lead the Way” transformation strategy.
• Valmet Corporation achieved EUR 15 million in savings from its new operating model during Q3 2025 and remains on track to meet its EUR 80 million annual savings target by early 2026.
• The company has reaffirmed its 2025 guidance and maintains strong liquidity, with EUR 479 million in cash and a net debt-to-EBITDA ratio of 1.50.
• Investor sentiment remains stable, with the share price up 21 percent year-to-date, supported by strength in the Process Performance Solutions segment.
• Management expects the layoffs to be temporary and tied to cyclical market conditions, emphasizing the company’s long-term focus on operational resilience and margin expansion.