Wind power giant Vestas to cut 600 jobs in Denmark and Germany

Danish wind power company Vestas is set to let almost 600 of its employees go in Denmark and Germany.

Wind power giant Vestas to cut 600 jobs in Denmark and Germany
A Vestas wind turbine blade displayed at an industrial trade fair in Hanover. File photo: Christian Charisius/Reuters/Ritzau Scanpix

A total of 590 jobs are to be cut by the company, including 90 at its factory at Lem near Ringkøbing and 500 at the factory at Lauchhammer south of Berlin.

The company confirmed the redundancies in a press statement.

The jobs cuts are a result of production moving to other parts of Europe due to customer demand for different types of wind turbine, the company said.

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Vestas director of operations Jean-Marc Lechêne said in a press statement that the wind power firm needed to adapt its costs to the demand for windmills.

“This is a very competitive industry and fast transitions in energy [towards renewable energy, ed.] mean that we must introduce new products and solutions where and when the market demands them,” Lechêne said.

A fall in prices and near collapse in the German market are among factors forcing Vestas to make the jobs cuts, according to Jacob Pedersen, a head analyst with Danish bank Sydbank who closely monitors the industry.

“Prices are significantly lower than they were just two years ago. That’s why there’s a need to be very careful about costs,” Pedersen said.

“When you can see that some of the products being made at factories are no longer in as high demand, while at the same time factories are located in markets that are smaller than before, you have to make cuts,” he added.

Vestas’ announcement comes after competitor Siemens Gamesa also announced it would be releasing 600 staff in Denmark, with people in Aalborg and Brande particularly affected.

Pedersen called the trend “natural”, with costs of production abroad lower than in Denmark.

“There’s no doubt that Denmark faces a challenge with production staff being more expensive than in many other countries, even though they are also very good,” he said.

“So I find it difficult to envisage new production jobs (in Denmark) being created in the future,” he said.

In its press statement, Vestas stressed that the Lem facility would remain in use as a centre for development of new windmill blades.

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Labour shortage hits half of Danish companies in construction sector

A record-high shortage of labour at some Danish companies is exacerbated in some places by a lack of materials, according to new data.

A file photo of construction in Aalborg. As many of half of construction companies in Denmark currently report a lack of labour.
A file photo of construction in Aalborg. As many of half of construction companies in Denmark currently report a lack of labour. Photo: Henning Bagger/Ritzau Scanpix

The construction industry reports a lack of labour at around half of all companies, according to a survey by Statistics Denmark, based on responses from businesses.

In the service industry, which includes restaurants, hotels and cleaning, one in three companies reported a lack of workforce.

Some industries, notable machinery related businesses, also said they are short of materials currently.

The lack of labour is holding the Danish economy back, according to an analyst.

“Never before have we seen such a comprehensive lack of labour in the Danish economy,” senior economist Søren Kristensen of Sydbank said.

“It’s a shame and it’s a genuine problem for a significant number of the businesses which at the moment are losing revenue as a consequence of the lack of labour,” Kristensen continued.

“That is costly, including for all of Denmark’s economic growth. Even though we on one side can be pleased that it’s going well for the Danish economy, we can also regret that it could have been even better,” the economist said in a comment to news wire Ritzau.

Despite the lack of labour, businesses have their most positive outlook for years, according to Statistics Denmark.

The data agency based its conclusions on a large volume of responses from companies related to revenues, orders and expectations for the future.

The numbers are processed into a measure termer business confidence or erhvervstillid in Danish. The October score for the metric is 118.7, the highest since 2010, although there are differences between sectors.

READ ALSO: Are international workers the answer to Denmark’s labour shortage?