Global power generation giant Wärtsilä is to slash up to 450 jobs in its Ship Power business in an attempt to claw back annual savings of €30m.
As many as 80 of the job losses will be in Finland as the company seeks to realign its organisation and resources to adjust to what it calls the substantially weakened global marine market situation”.
The effect of the savings will start to materialise gradually from the second part of 2009 and will take full effect by the end of 2010.
It also warned that there was a potential risk of Ship Power order cancellations amounting to approximately €1billion because of the spate of newbuilding cancellations. It incurred cancellations of €75 million during the period January-April 2009 that were deducted from the order book.
Jaakko Eskola, Group Vice President, Ship Power, said in a statement: “The situation in the shipping industry has changed dramatically during the past six months, and we have taken all possible measures to avoid job cuts.”
“As the market outlook continues to be very challenging, we must find cost-saving measures that ensure the Ship Power organisation’s ability to maintain its competitiveness and efficiency, while at the same time, not jeopardising customer commitments,” he added.
Due to the global economic crisis, the shipping industry and shipbuilding markets have collapsed after a long period of high demand. In the four months to April 2009, the order intake of Ship Power plunged to €135 million, 86% down against the corresponding period a year earlier.
Wärtsilä added: “In addition to lowered demand, there are risks related to delivery of existing orders as well as order postponements. Wärtsilä sees a potential risk of Ship Power order cancellations amounting to approximately €1billion. During the period January-April 2009, cancellations of €75 million materialised and were deducted from the order book.”
Wärtsilä Ship Power has approximately 1300 employees, with the main disciplines being sales, project management, engineering services and ship design. Wärtsilä Ship Power has operations in some 30 countries.