200 Danish jobs could be lost in Vestas cuts

Wind power giant Vestas is set to make cuts that will see up to 400 job losses, including 200 in Denmark.

200 Danish jobs could be lost in Vestas cuts
Photo: Henning Bagger/Ritzau Scanpix

Of the 200 jobs that will be cut in Denmark, 80 will be at the company’s factory in Hammel near Aarhus.

The redundancies in Denmark will primarily hit office staff, with the final figure dependent upon negotiations with employee unions, the company’s head of press communications Ander Riis confirmed.

Changes in the industry have resulted in growth becoming concentrated outside of Europe, resulting in the decision, according to Vestas.

The company is therefore making changes to its workforce relative to overheads and demand, it said.

“This is a result of growth being outside of the traditional wind markets – in other words, outside of Europe,” Riis said.

“Globally, we are seeing high demand for wind power and it is crucial that we have the right setup to meet that demand,” he said.

Jacob Pedersen, a market analyst with Sydbank who follows the industry closely, said the round of costcutting was a natural step for the wind power company.

“Vestas is part of a market that has undergone large changes in recent years. The sales price of wind turbines has fallen significantly and Europe is no longer Vestas’ bastion,” Pedersen said.

The company has between four and five thousand employees in Denmark and 24,300 in 79 different countries globally.

After Denmark, most of the job losses will be in Germany and other parts of north and central Europe.

Vestas expects to cut costs by 225 million kroner annually from 2019.

Eighteen months ago, the company announced 400 new jobs in Denmark at two extended factories, but announced later in 2017 a downward adjustment in its annual outlook amid a fall in share prices.

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Danish wind turbine giant Vestas looking offshore after strong results

Vestas, the global leader in wind turbines, posted stronger annual results Wednesday and said it was looking to expand crucial offshore operations with a giant new model.

Danish wind turbine giant Vestas looking offshore after strong results
Photo: Henning Bagger/Ritzau Scanpix

The Danish company reported a 10 percent rise in net profit to 771 million euros ($933 million) for 2020, even though its supply chain had been affected by the coronavirus pandemic.

Sales jumped 22 percent to a record 14.82 billion euros, a statement said.

One disappointing number was for orders however, which declined by eight percent to 12.7 billion euros in a sector where competition is stiff and global investment is growing.

Vestas has long been a leader in onshore turbines and must now catch up with offshore rivals such as the German/Spanish group Siemens Gamesa or the US multinational General Electric (GE).

“To lead the expansion of wind energy into becoming the dominant energy source, it is crucial for Vestas to become a leader in offshore wind,” the statement quoted president and chief executive Henrik Andersen as saying.

In October, Vestas spent 700 million euros to gain full control of the sea-based unit it launched in 2014 with the Japanese group Mitsubishi Heavy Industries.

This year, Andersen said the Danish company's focus “will be to fully integrate offshore (operations) and address executional challenges”.

Vestas unveiled a 15-megawatt offshore turbine design that it expects to begin installing in 2024.

For 2021, Vestas is targeting sales of 16-17 billion euros, which would represent a gain of eight to 15 percent.

In midday trading on the Copenhagen stock exchange, Vestas shares showed a drop of 3.9 percent to 1,227.50 kroner, while the OMX Nordic 40 index on which it is listed was 0.2-percent lower overall.