Vestas Announces Further Workforce Reductions

Vestas has announced an increase in the expected fixed cost reduction to €250m from the earlier stated €150m. This is based on a forecasted shipment of around 5GW in 2013 which will result in a lower activity level in 2013 to which the company will naturally have to adapt.

The company had previously announced that the workforce would be reduced by 2,335 by the end of 2012, Vestas says the reductions are ahead of schedule and to reach that number a further 1,100 employees will be made redundant by the end of September 2012. Further employees will then be made redundant before the end of the year bringing the total number of employees down to around 19.000 by the end of 2012.

CEO Ditlev Engel says Vestas is intensifying earlier cost reduction plans in order to prepare for a “challenging” 2013.

The further reduction in the workforce is part of the continued cost saving plans which Vestas has been working on since November 2011, 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.

It is expected that around 55% of the reductions will happen in Europe, the Middle East and Africa, around 25% in the Asia Pacific and around 20% in the Americas. Details about the exact split on market level will be communicated as soon as negotiations with the unions have been finalised.