Elekta Reports 1% Q2 Growth Amid Major Restructuring and 10% Workforce Reduction
## Executive Summary
**Elekta AB (EKTAF)** has announced second-quarter financial results that show a slight 1% organic growth, bolstered by an 11% sales increase in Europe. This growth is juxtaposed with a significant strategic pivot towards operational efficiency, involving a major restructuring and a 10% reduction of its global workforce. The company aims to realize annual cost savings of no less than SEK 500 million, signaling a disciplined approach to improving long-term profitability amidst a mixed market performance.
## The Event in Detail
According to its Q2 2025/26 report, Elekta's net sales grew by 1% at constant exchange rates. The key driver was strong double-digit growth in Europe, where the company's new product portfolio is gaining significant market traction. Financially, the company demonstrated improved profitability and cash management. Adjusted EBIT amounted to SEK 411 million, corresponding to an adjusted EBIT margin of 10.1%, an increase from 9.8% in the prior-year period. Furthermore, operating cash flow after continuous investments saw a substantial year-over-year improvement of SEK 389 million, reaching SEK 358 million for the quarter.
The centerpiece of the announcement is the corporate reorganization. Elekta is transitioning to a simplified, decentralized operating model. This strategic shift will lead to a reduction of approximately 10% of its workforce. The full effect of the associated cost savings, projected to be at least SEK 500 million annually, is expected to commence in the first quarter of the 2026/27 fiscal year.
## Market Implications
The dual announcement of modest growth and deep restructuring presents a complex picture for investors. The significant workforce reduction and operational overhaul, while disruptive, are aimed squarely at enhancing long-term shareholder value through improved efficiency and higher margins. The targeted SEK 500 million in cost savings is a material figure that could substantially bolster the company's bottom line in the coming years.
While the growth in Europe demonstrates the strength of Elekta's product lineup, the overall 1% growth rate points to challenges in other regions. The restructuring may be interpreted as a necessary measure to navigate these challenges and position the company for more sustainable profitability rather than relying solely on top-line growth.
## Broader Context
Elekta's decision to reduce its workforce by 10% aligns with a broader trend seen across various industries, where major corporations are implementing significant layoffs to streamline operations and manage costs in a complex global economy. Companies like **HP** and **Amazon** have recently announced similar workforce reductions, often citing strategic pivots and the pursuit of efficiency. For instance, HP announced plans to cut up to 10% of its workforce to pivot toward artificial intelligence, while Amazon initiated a reduction of its corporate roles. Elekta's move, therefore, is not in isolation but reflects a wider corporate strategy of prioritizing operational leanness to build resilience against market uncertainties.
