Vestas continues downward spiral with 3,000 new job cuts

Wind turbine maker seeking to save additional billion kroner through workforce reduction

November 7th, 2012 9:43 am| by admin
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With a previous round of 3,700 layoffs not yet finished, Vestas has released third quarter figures showing that 3,000 more workers will soon be getting pink slips.

The company announced that it was seeking to reduce its workforce to 16,000 by the end of 2013. At the end of 2011 the company employed nearly 23,000 people. When all is said and done, Vestas will have reduced its workforce 30 percent.

“Vestas is working on an evaluation of its production, including identification of opportunities for outsourcing and divestments,” the company wrote in a statement. “We expect to reduce headcount further during 2013 through divestments, hiring freezes and layoffs.”

The new savings plan is expected to cut costs by just over one billion kroner, contributing to a total reduction of nearly three billion kroner between 2011 and 2013.

The report also shows that Vestas does not expect to earn money in 2012. Experts had been sceptical when interim financial statements indicated the company might end the year on in the black. This latest report reveals the company will do no better than break even this year and could wind up as much as 3 billion kroner in the red.

The changes are due to lower expectations for new orders in 2012 and uncertainty as to cash flow in the last weeks of 2012 and the first weeks of 2013, the company reported.

The report contained no mention of a much-rumoured partnership with the Japanese industrial giant Mitsubishi. Vestas had earlier confirmed mutual interest between the two groups, primarily geared toward easing cash flow problems. Earlier this week, however, it was reported that negotiations had bogged down and Vestas was seeking a possible new partner.

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