Renewcell explained it is planning to start negotiations with the relevant trade unions regarding the restructure of the organisation and 25% workforce cuts to improve efficiency while maintaining a focus on sales.
As part of the restructure, Renewcell will engage in discussions with local authorities, specifically Arbetsförmedlingen.
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The anticipated outcome of Renewcell’s restructure will be reducing the workforce by a quarter (25%), which is the equivalent of just over 30 positions.
These changes are projected to yield annual savings in terms of both personnel costs and other operational costs, amounting to SEK35m per year upon completion.
Magnus Håkansson, the acting CEO of Renewcell commented: “This kind of decision is never easy to make and would not be planned for unless it was absolutely necessary for our long-term success.”
This news follows Renewcell’s decision to conduct a strategic review back in November to find ways of securing additional funding after announcing lower-than-expected sales volumes to fibre producers in its third quarter as well as subdued sales in October.
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By GlobalDataRenewcell entered into a short-term financial agreement in December 2023 with major shareholders H&M Fashion AB and Girincubator AB to secure additional liquidity of SEK50m, plus SEK50m from its existing lenders.
At the time the textile-to-textile company believed the financial arrangement would resolve its short-term liquidity need, which it claimed was caused by slower-than-expected sales in the textile value chain.
However, Håkansson’s latest statement suggests he now believes the restructuring of the organisation will be the answer.
He said: “The planned restructuring of the organisation means that Renewcell will maintain conditions for efficient production while continuing to focus on the development of sales to fibre producers as well as focusing on marketing activities to the major clothing brands that determine the final demand in the supply chain.”
