Vestas further intensifies cost saving plan
08:30 CET - 07 Nov. 2012
Despite an increase in revenue of 49% compared to Q3 2011, two consecutive profitable quarters in 2012 and an expectation of a profitable Q4 2012, Vestas now further intensifies cost out initiatives to adapt to an uncertain market for installation of wind turbines.
Before the end of 2013 Vestas expects to save an additional EUR 150m, which will bring the yearly cost reductions in Vestas since the end of 2011 to a total of EUR 400m. The increased cost reductions will be realised through divestments, continuation of the hiring freeze and some additional layoffs.
CEO Ditlev Engel says this further intensification of cost saving initiatives happens as part of the plan to create a scalable and flexible business model ready to adapt quickly to the changing market conditions.
“Vestas is progressing faster than expected in executing the plan we have earlier announced to lower the operating costs of the company. We expect 2013 to be a tough year for the wind industry and to adapt to future uncertain market development we have decided to further intensify our cost saving plan to make sure we are scalable and able to react fast to the challenges we expect in the market in the coming years.”
Workforce reductions ahead of plan
As Vestas is executing the cost out initiatives ahead of plan the company now expects to be around 18,000 employees by the end of 2012 or early 2013 compared to the earlier announced 19,000.
The change from 19,000 to 18,000 is due to already planned reductions, employees working through their termination period as well as temporary contracts not being renewed.
As part of the current intensification, Vestas expects to reduce the number of positions in the company by an additional 2,000 before the end of 2013 – meaning that Vestas expects to be around 16,000 employees at the end of 2013. In the beginning of 2012, Vestas employed around 22.700 people.
“However difficult it is to make further cost savings and also further reduce the workforce, it is simply necessary in order to create an even leaner and more agile Vestas to ensure the company’s continued profitability in a very uncertain and unstable wind turbine market,” says Ditlev Engel and concludes: “I am however pleased to say that we expect a part of these reductions to happen through divestments, which means that our employees will maintain their jobs, only they will be working for a different employer than Vestas”.
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