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Vestas plans redundancies in austerity drive for 2012

DENMARK: Vestas is planning a restructure of the company in early 2012 with the aim of reducing fixed costs.

Vestas CEO Ditlev Engel: "...this will lead to redundancies"
Vestas CEO Ditlev Engel: "...this will lead to redundancies"

Announcing the plan during the company’s Q3 results, Vestas CEO Ditlev Engel said it needed to reduce costs by at least €150 million by the end of 2012.

The company’s ‘Triple 15’ growth target for 2015 - €15 billion in revenue and an Ebit margin of 15% - has also been dropped.

Engel said: "Vestas is the world's largest renewable energy company, and we intend to emerge stronger from the financial crisis. Consequently, in addition to adjusting our organisation, we also need to substantially reduce our fixed costs. In a number of markets, our fixed costs are too high relative to the market situation that is likely to develop.

"Unfortunately, this will lead to redundancies across Vestas in 2012. Our cost level is too high – especially in a number of the markets currently seeing the weakest growth rates. Furthermore, Vestas overall must improve its ability to absorb adverse events, for example if the PTC [Production Tax Credit] scheme in the USA is not extended after the end of 2012."

The new Vestas structure will be announced to employees on 8 February 2012.

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