It had seemed that the winds of fortune had finally found the sails of Vestas a few weeks ago when the value of the distressed Danish wind-turbine producer’s shares jumped nearly 20 percent after it revealed the development of a potential strategic co-operation with Mitsubishi Heavy Industries.
But Vestas had forewarned in late August that there would be dismissals and negotiations on the layoffs are scheduled to begin on Thursday. The company will cut 650 jobs in Denmark, leaving it with about 5,000 employees throughout the country.
“That we have to say goodbye to good and dedicated workers that have been loyal to Vestas during a time with challenges is deeply regrettable,” Vestas CEO Ditlev Engel wrote to his stockholders. “But if Vestas is to keep giving profits we must make organisational adjustments now.”
The round of layoffs comes as no surprise to employees or investors. Vestas launched a considerable savings plan involving the staff reduction of 2,200 people globally in a bid reduce expenses by 1.1 billion kroner.
That plan was supplemented by another to further dismiss an additional 1,400 employees in their attempts to reach 19,000 employees globally by 2012.
According to Vestas, the plan will save about 1.865 billion kroner in overheads effective of the end of 2012.
But according to financial management firm Sanford C. Bernstein, Vestas needs to layoff a further 6,500 employees worldwide to get back on track.
Vestas's recent troubles have been well-documented. In 2008, Vestas’s share price almost topped 700 kroner, but currently stands at around 40 kroner.