Vestas axes 400 jobs due to Covid-19 crisis

Vestas will lay off approximately 400 employees, mostly in Denmark, and end production of a turbine model, in an attempt to shield the company during the coronavirus (Covid-19) pandemic.

Vestas explained it was cutting jobs in a period of "high uncertainty" caused by the Covid-19 pandemic

Vestas will stop production of the V138-3.0MW as part of a cost-cutting strategy as the ongoing pandemic squeezes supply chains and profit margins. 

Most of the Danish job cuts will take place in Aarhus and Lem due to technological projects driven from those locations being stopped, the manufacturer explained. There will also be a “limited number” of layoffs in other locations in Europe.

It has a turbine research and development facility in Aarhus and a blade production site in Lem.

Most of the lost jobs will be from manufacturing and technology segments.

Vestas will also close a temporary facility it had set up in Viborg, Denmark for projects being carried out by its offshore wind turbine manufacturing joint venture MHI Vestas.

A spokesman told Windpower Monthly: "In Denmark, the legal process for collective layoffs will now commence and be done in accordance with the Danish legal requirements.

"Negotiations are expected to take place during the coming weeks and the affected employees in Denmark will receive their termination letters no later than 10 days after completion of the negotiations."

Vestas' executive management team will also take a 10% pay cut until the end of 2020.

The world's leading manufacturer suspended its guidance for the calendar year because of the “poor visibility” caused by the ongoing pandemic. 

It had expected revenue of €14-15 billion, an Ebit margin before special items of 7-9%, and total investments of about €700 million in 2020.

But the spread of the virus has disrupted supply chains, including forcing Vestas to halt production at its factories and pause construction of wind farms using its turbines.

“We’re in a period of high uncertainty and by making a strategic decision on our product portfolio and reduce complexity, we sustain our competitiveness in the future and ensure we can adjust quickly to Covid-19 challenges," CEO, Henrik Andersen, said.