Vestas job cuts continue
In addition to their current financial woes, Vestas Wind Systems A/S is cutting a further 1,400 jobs to lower costs by more than 250 million euros ($311 million) in preparation for a decline in wind turbines installations it expects next year.
The world’s biggest maker of the machines said it expects to have 19,000 employees at the end of the year, down 16% from the end of last year. It’s still considering whether to eliminate 1,600 jobs in the U.S., which is a decision that depends on a tax credit that expires this year. Vestas in January said it would cut 2,335 jobs this year, bringing overall headcount to 20,400.
Vestas is suffering from increased competition from rivals such as Nordex SE in Germany and Xinjiang Goldwind Science & Technology Co. Ltd. in China at the same time governments from the U.S. to Europe are slashing subsidies.
Losses for the first half widened to 170 million euros from 30 million euros a year ago as margins narrowed. Vestas shares rose as much as 7% to the highest since June 1. They were up 2% at 34.58 Danish kroner at 9:43 a.m. in Copenhagen.
Of the 2,700 job cuts that remain this year, 55% will be in Europe and Africa, 25% in the Asia-Pacific region, and 20% in the Americas, according to Vestas. Those proportions work out to roughly 1,485 posts in Europe and Africa, 675 in Asia-Pacific and 540 in the Americas.
Vestas also reiterated full-year targets for revenue of 6.5 billion euros to 8 billion euros and a margin before interest and tax of zero to 4%, while cutting predicted shipments to 6.3 GW from 7 GW. Vestas said it expects shipments to decline further to 5 GW in 2013, hastening the need for job cuts. Lower shipments “will result in a significantly lower activity level in 2013 to which the company will naturally have to adapt,” Vestas said.