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Vestas slashes another 1,400 jobs - for now

WORLDWIDE: Danish turbine manufacturer Vestas may be forced to further reduce its staff levels, despite announcing 1,400 jobs cuts in August on top of the 2,335 redundancies it revealed in January.

At the moment Vestas expects in total to make 3,700 staff redundant in 2012. This will see Vestas end the year with just 19,000 staff globally, rather than the 20,400 predicted when the firm announced its restructuring plan at the start of the year.

However, Ditlev Engel, the troubled turbine manufacturer's chief executive, refused to rule out further cuts at the firm's US facilities if the country's production tax credit (PTC) subsidy expires at the end of the year, he told Windpower Monthly.

"The 3,700 job cuts we have announced are before we have taken a decision on our manufacturing footprint in North America," said Engel, speaking in August as Vestas published it financial results for the first half and second quarter of 2012.

Geographical spread

So far Vestas has let go 1,000 staff this year. Of the remaining 2,700 identified job losses, the company says they will be split geographically as follows: 55% in Europe and Africa, 25% in Asia Pacific and 20% in the Americas.

Engel said the cuts will be across the business and largely as a result of mergers of different parts of its business, announced as part of its restructuring plan in January. He ruled out ending production lines for any Vestas turbines or stopping any of the firm's other services. He also denied there would be further mergers.

"Not much left to merge"

"Earlier in the year our control systems division became part of Vestas Nacelles, and now our blades and nacelles divisions are also being merged into one unit," said Engel. "There's not that much left to merge."

Engel said Vestas is making the additional 1,400 job cuts in order to ensure it remains profitable in 2013, when shipments of turbines are expected to fall to 5GW due to a cooling of the global market.

While this is broadly in line with Vestas' shipments last year (5.05GW), it is significantly down on the 6.3GW it expects to ship this year. The firm has shipped 3.09GW of turbines in the first half of 2012 alone.

The revelation of further job cuts came as Vestas published its results for the first half of 2012. It made a EUR164 million pre-tax loss for the period, compared to an EUR8 million profit in the first half of 2011.

It was not all bad news for the firm, however, as the value of its orders amounted to EUR9.6 billion on 30 June 2012. Combined with the future revenue of signed service agreements, Vestas now has work on its books totalling EUR14.4 billion - the highest level ever recorded.

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