3000 Jobs Axed at Troubled Vestas

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- Shrinking orders for wind turbines has been blamed for troubled wind energy company, Vestas Wind Systems (OTC:VWDRY) (Randers, Denmark), confirming plans for another 3,000 job cuts.

The company claimed that its goal to shrink its workforce to 19,000 by the end of the year or early 2013 has been revised and that another 1,000 jobs will have to go. In addition, Vestas will slash another 2,000 before the end of 2013, meaning the workforce will then stand at around 16,000. At the start of this year, Vestas employed around 22.,700 people. By the end of next year, the additional cuts will result in savings of around €150 million ($190.6 million), bring the total saving since rationalisation started in 2011 to around €400 million ($508 million).

The company said that the cuts are still necessary despite an increase in revenue of 49% compared to Q3 2011, two consecutive profitable quarters in 2012 and an expectation of a profitable Q4 2012. The company claimed it must prepare for an "uncertain market for installation of wind turbines".

CEO Ditlev Engel commented: "Vestas is progressing faster than expected in executing the plan we have earlier announced to lower the operating costs of the company. We expect 2013 to be a tough year for the wind industry and to adapt to future uncertain market development we have decided to further intensify our cost saving plan to make sure we are scalable and able to react fast to the challenges we expect in the market in the coming years."

He added: "However difficult it is to make further cost savings and also further reduce the workforce, it is simply necessary in order to create an even leaner and more agile Vestas to ensure the company's continued profitability in a very uncertain and unstable wind turbine market."

The new cuts come just months after the Danish wind turbine manufacturer announced plans to axe 1,400 jobs. At the time, the company blamed increased competition from new Chinese rivals, lower orders and reduced subsidy levels by a number of governments. For additional information see August 28, 2012, article - Vestas Axes 1,400 Jobs.

A month earlier in May, the company abandoned plans to construct an offshore wind turbine manufacturing plant in the U.K. The plant was to be developed at a 70 hectare site at the Port of Sheerness, in Kent, southeast England and was designed to allow Vestas exploit the country's huge plans for offshore wind. For additional information see May 29, 2012, article - Vestas Dumps Plans for U.K. Turbine Plant.

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