Vestas had previously announced the workforce would be reduced by 2.335 by the end of 2012, these reductions are ahead of schedule and to reach that number 1.100 employees will be made redundant by the end of September 2012. Further employees will then be made redundant before the end of the year bringing the total number of employees down to around 19.000 by the end of 2012.

CEO Ditlev Engel says Vestas is intensifying earlier cost reduction plans in order to prepare for a challenging 2013.

“The further reduction in the workforce is part of the continued cost saving plans which Vestas has been working on since November 2011,” he says. “It is always unfortunate to have to say goodbye to good colleagues in Vestas, but we have said before that 2012 will 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.”

How the reductions will affect Vestas

Global Senior Vice President of People & Culture Roald Steen Jakobsen says the further reduction in the workforce demonstrates Vestas is in full control of the cost reduction plan.

“Vestas is currently three months ahead of  schedule  in regards to employee reductions in the organisation and being able to intensify this plan in order to increase our cost savings target proves that Vestas is in full control and able to take the necessary action to secure profitability also in 2013,” he says.

“In order to determine which job functions will be affected by the reduction, Vestas is prioritising to maintain functions which are directly revenue or business generating,” finishes Roald Steen Jakobsen.

The workforce reductions will primarily affect salaried employees and it is expected that around 55% of the reductions will happen in Europe, the Middle East and Africa, around 25% in Asia Pacific and around 20% in the Americas. Details about the exact split on market level will be communicated as soon as negotiations with the unions have been finalised.

In order to prepare for 2013 which will be even tougher than 2012, Vestas has announced an increase in the expected fixed cost reduction to EUR 250m from the earlier stated EUR 150m. This is based on a forecasted shipment of around 5GW in 2013 which will result in a significantly lower activity level in 2013 to which the company will naturally have to adapt.