Vestas has announced it is laying off approximately 400 employees globally.
Vestas, which has business in 79 countries, says it is seeing a shift in growth from more traditional wind markets to high-growth markets primarily outside of Europe. Accordingly, this requires Vestas to shift its global footprint to ensure costs are balanced with activity levels, the company explains.
Approximately 75% of the layoffs will occur in markets in northern and central Europe. As of June 30, Vestas employed 24,300 people globally, making this staff reduction approximately 1.6% of the company’s global workforce.
“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,” states Anders Runevad, president and CEO of Vestas. “With today’s announcement, Vestas continues to proactively manage its cost base and ensure an agile organization that enables us to invest in products and services that meet customer needs and markets where we can capture future growth.”
According to Vestas, most of the intended staff reductions are expected to be within “white-collar staff,” with approximately 60% of those being in Denmark and Germany.
Vestas’ record order backlog, including deliveries in all global regions, means production capacity is relatively unaffected by these layoffs and will have no impact on its ability to deliver on current and future orders, the company clarifies.
However, Vestas’ factory in Hammel, Denmark, intends to reduce its staff by approximately 80 employees. The factory, which produces wind turbine converters, will increase its focus on introducing new products, including prototype building, testing and documenting. This allows Vestas to effectively collaborate with its main research and development and testing sites in Denmark, the company says.
The legal process for collective dismissals will now commence and will be done in accordance with legal requirements, Vestas notes. The organizational changes are expected to lead to annual savings of approximately EUR 30 million from 2019.