Vestas announces 400 job cuts

DENMARK: Vestas intends to lay off approximately 400 employees in an attempt to "shift its global footprint" as new, emerging markets accelerate development.

Vestas stated the majority of jobs would fall in Germany and Denmark
Vestas stated the majority of jobs would fall in Germany and Denmark

About 75% of these redundancies will be made in markets in northern and central Europe, including about 240 in Germany and Denmark.

Most of the staff reductions are expected to be white-collar staff, the manufacturer added, although about 80 employees will be laid off from its wind turbine converter factory in Hammel, central Denmark.

Vestas stated its production capacity will be "relatively unaffected" by these lay-offs and that there would be "no impact" on its ability to deliver on current and future orders.

As of 30 June, Vestas employed 24,300 people globally, meaning the round of redundancies represents just over 1.6% of the company’s workforce.

The manufacturer stated a "shift in growth from more traditional wind markets to high-growth markets primarily outside of Europe" meant the company must "shift its global footprint to ensure costs are balanced with activity levels".

In 2018, Vestas has confirmed orders in Senegal, Serbia, Australia, Bolivia, Jordan, Thailand, Kazakhstan and Panama among other markets.

It has also expanded production in Russia and Argentina, but closed a nacelle factory in Spain amid decreasing European demand for its 2MW turbines.

The process for collective dismissals will now commence and be carried out in accordance with legal requirements, the manufacturer stated.

Vestas CEO Anders Runevad, said: "It’s always hard to let good, hardworking colleagues go, but with most of market growth expected to be outside of Europe, our global footprint must reflect the market development we see in order to grasp those growth opportunities."

The OEM's revenue fell in the first half of the year as price pressures continued to batter the industry.

However, it recorded an order backlog of 13.5GW — worth a company high of €10.2 billion — at the end of June.

Growing order book

Vestas also announced a flurry of orders, alongside the job cuts, to end the third quarter:

It will supply and commission 356MW of its V110-2.0MW turbines for MidAmerican Energy’s 2GW Wind XI project in Iowa, US. The turbines will be manufactured at Vestas’ factories in Colorado and delivery will begin in the second quarter of 2019. In total, Vestas will provide just over 1.9GW at Wind XI, while rival OEM Siemens Gamesa is due to provide the balance.

The company has also renewed a long-term service agreement for 602MW of turbines in Texas for an unspecified customer. 

Vestas also confirmed it will build the 181MW Berrybank project in Australia for Global Power Generation. It will comprise 43 of its V136-4.2MW turbines with 112-metre hub heights.

Its anti-icing system will also be used for the first time, at Swedish developer OX2’s 42MW Brännliden project in the north-east of the country. The wind farm will comprise ten V136-4.2MW turbines due to be installed in the third quarter of 2019.

The manufacturer will supply Argentinian aluminium smelter Aluar Aluminiuo Argentino with 14 of its V136-3.45MW turbine specifically increased to 3.8MW. It plans to deliver the turbines for the 53MW Llano wind farm in Chubut province, southern Argentina in the fourth quarter of 2019.

In India, Sitac and EDF Renewables placed an order for 50 V120-2.2MW turbines with capacities reduced to 2MW in load-optimised mode for a project in India’s westernmost state, Gujarat. The developers were awarded the capacity in Gujarat’s auction held in December 2017. Turbine delivery is expected in the first quarter of 2019 and commissioning by the third quarter of the same year.  

The Danish firm has also secured a 59MW order for 14 V150-4.2MW turbines for Wpd’s Kuuronkallio project in the Kalajoki region on the west coast of Finland. Turbine installation is scheduled for the second half of 2019.

Vestas also received its first orders for its V136-4.2MW model in North America. It will provide the turbine for 146MW across multiple unspecified projects in Canada.

The manufacturer also received its first orders for its V150-4.2MW model in North America and Germany. It will provide 252MW of the model at three unspecified projects in the United States, as well as 72MW of its V136-3.45MW turbine delivered in 3.6MW power optimised mode. It will also provide Notus Energy Plan with two of the V150-4.2 model and one unit of the V136-3.6 for the Lübbenow II and Lübbenow III wind farms in Brandenburg, east Germany,

Vestas had first unveiled its 4.2MW turbine in June 2017.

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