Vestas wind turbine firm to cut another 1,400 jobs

BBC • Posted: Wednesday, August 22, 2012

Danish wind turbine firm Vestas has announced plans to cut another 1,400 jobs as it prepares for a drop in business next year as demand slows.

The company cut its forecasts for the shipments of turbines this year, and said 2013 would be “even tougher”.

Earlier this year, Vestas had said it would cut 2,335 jobs during 2012.

The latest cuts will reduce Vestas’ total workforce to 19,000 and generate an extra 100m euros ($125m; £79m) in cost savings.

“The further reduction in the workforce is part of the continued cost saving plans which Vestas has been working on since November 2011,” said Vestas chief executive Ditlev Engel.

“It is always unfortunate to have to say goodbye to good colleagues in Vestas, but we have said before that 2012 will be tough and 2013 will be even tougher for Vestas, and in order to reach our target of making 2013 profitable, it is unfortunately a necessity.”

Vestas said that it expected about 55% of the job cuts to be made in Europe, the Middle East and Africa, about 25% in the Asia Pacific region, and about 20% in the Americas.

It added that exact details on which jobs would be cut would be released as soon as talks with unions had finished.

 Spending pressure

In its half-year results statement, Vestas cut its forecast for turbine shipments in 2012 to 6.3 gigawatts from its earlier forecast of 7GW.

It said this was due to lower order levels in the first half of the year, and delays to grid connections in China.

For 2013, it said it was expecting shipments of about 5GW.

Vestas noted that the global economic crisis was putting pressure on indebted countries to cut spending which could affect demand for renewable energy, including wind power.

A “large number” of subsidy schemes are being reconsidered, Vestas said. This meant some of its customers were adopting a “wait-and-see” approach, which could reduce demand for turbines.

For 2012, Vestas maintained its forecasts for an operating profit margin of 0-4%, and for revenue of between 6.5bn and 8bn euros.