When the CEO of the world’s No. 1 turbine maker, Vestas, said earlier this year that the global downturn was slashing demand for its products, it seemed like only a matter of time before the company would respond with cuts. The rest of the wind industry hasn’t been shy about layoffs. Well, here it is: Vestas is cutting 1,900 jobs — 9 percent of its work force — largely in the UK (closing a turbine plant on the Isle of Wight) and Denmark.
The tough cuts are a result of oversupply in Northern Europe, says the Danish turbine maker. Back in January, Vestas CEO Ditlev Engel said that the company had 15 percent excess manufacturing capacity because of lowered demand. Falling demand and an inability to raise project financing have caused wind firms in the U.S. and Europe to lay off staff left and right, including at companies like Clipper Windpower, Gamesa and DMI Industries.
But despite the planned cuts, Vestas is still financially very strong — it reported a 70 percent boost in profits for its first-quarter earnings (announced today). Vestas last quarter had killer numbers, too. For now, Vestas is aiming straight at the U.S. market (its largest market by sales) where the stimulus package is set to pump money into renewable energy projects.