By Kari Williamson
The 2335 job cuts involves the closing down of a wind turbine tower factory in Denmark and cuts in administrative posts. Over half (1500) of the layoffs are in Denmark. Vestas will still have 20,400 employees globally after the cuts, of which 5300 will be in Denmark.
Vestas says it aims to merge production units and centralise administrative functions, hoping to cut fixed costs by €150 million.
“I am truly sorry that we have to say goodbye to so many skilled and loyal Vestas colleagues. The expected layoffs are one of many steps that we now take in order to bring down costs allowing continuous development of our products and services and optimising our already global presence in a highly competitive wind energy market,” CEO Ditlev Engel says.
He adds: “Vestas is in fact the only global player in the wind power industry and in several of our markets, we experience that the economic crisis delays and complicates the necessary transformation towards a more sustainable supply of energy.”
US PTC expiry threatens more jobs
Vestas also says an additional 1600 jobs could go in the USA if the PTC is not extended beyond the end of 2012. “We are now preparing Vestas for the situation where one of our largest single markets, the USA, may be facing a tough 2013. This will have a huge impact on our business, if we do not act now,” Engel says.
This could mean a third round of layoffs at Vestas in the same number of years. The news has already caused anger in Vestas' home country, Denmark.
Engel comments: “I can certainly understand if employees as well as people outside Vestas consider us to be in a state of crisis. The challenge we have faced in the fourth quarter of 2011 have given us a credibility problem. It is not undeserved. We have to work our way out of this situation and the only way we can do that is by proving that we with our global presence, have customer satisfaction and the industry's best performing wind power systems will come out stronger after the elimination race which is currently taking place within the renewable energy sector.”
Reorganisation
The layoffs are part of a larger reorganisation effort at Vestas, which will see the wind turbine manufacturer sharpening its focus on its two core business areas: Turbines, and Global Solutions and Services.
Furthermore, the Executive Management will be reduced from 14 to 6 people to reduce decision-making times and to increase efficiencies.
“In 3022, we managed to secure a significant number of orders in a difficult market. But we want to get even closer to our customers and therefore we are creating a much more customer-oriented Vestas,” Engel says.
“We are changing the organisation by introducing a new Global Solutions and Services unit geared to developing new services to existing and future wind power systems in order to take advantage of our unique knowledge of wind. In this way, we strengthen Vestas' ability to develop customers' businesses in an increasingly high-tech driven wind energy industry.”
Engel concludes: “...it is now time for us to create an organisation with a stronger and faster decision-making power to accommodate the change the wind power market is going through. This is necessary in times like these when Vestas must be able to absorb very large market fluctuations.”