Vestas, the world's largest manufacturer of wind turbines, has announced plans for more job cuts as it prepares for a drop in business next year in the face of slowing demand. The Danish firm has cut its forecasts for the shipments of turbines this year, to 6.3 GW from its earlier forecast of 7 GW, and said 2013 would be "even tougher". For 2013, it said it was expecting shipments of about 5 GW.
The company expects to shed 1400 jobs on top of the 2335 job losses already announced in January this year. The latest cuts will reduce Vestas' total workforce to around 19 000, but will generate about 100m euros in cost savings. About 55% of the cuts will be made in Europe, the Middle East and Africa, about 25% in the Asia Pacific region, and about 20% in the Americas. The company is standing by its 2012 forecasts for an operating profit margin of 0-4%, and for revenue of between 6.5bn and 8bn euros.
"The further reduction in the workforce is part of the continued cost saving plans which Vestas has been working on since November 2011," said Vestas chief executive Ditlev Engel. "[We expected] that 2012 would 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."
Vestas believes the root cause of the slowdown is that the global economic crisis is putting pressure on indebted countries to cut spending, which could affect demand for renewable energy, including wind power. A large number of subsidy schemes are being reconsidered, Vestas said. This meant some of its customers were adopting a wait-and-see approach, which could reduce demand for turbines.
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