Finnish power solutions provider Wärtsilä has announced the realignment of its ship power business that will result in the termination of 600 jobs.
Wärtsilä says the cuts come amid the maritime industry’s sluggish recovery from the global economic and overall weak global marine market.
The realignment includes the renaming of Wärtsilä Ship Power to Wärtsilä Marine Solutions, effective immediately, and will affect personnel in all functions of Wärtsilä Marine Solutions’ global operations. This includes the reduction of approximately 600 jobs, of which some 160 will be in Finland, the company says. A portion of the reductions will be realized through retirements.
“The marine industry has been slow in recovering from the global economic crisis and new shipbuilding contracting is weak,” said Jaakko Eskola, President, Marine Solutions, Senior Executive Vice President, Wärtsilä Corporation. “At the same time, the offshore oil & gas industry has been adversely affected by lower oil prices. In addition, there are risks related to vessel owners negotiating extensions to existing delivery contracts. The combined impact of these developments has created a challenging market situation for the entire marine sector.”
Wärtsilä says that as a result of the cuts, it will realize annual savings in the range of EUR 40 million, which will materialize gradually beginning from the third quarter of 2015 and will take full effect by the end of 2016. The non-recurring costs related to the restructuring measures will be approximately EUR 25-30 million, Wärtsilä says.
“These unfortunate capacity adjustments have to be made in this current environment of low demand in order for us to maintain our competitive position in the global market. Despite streamlining the organisation, our commitment to our customers remains absolutely solid,” Eskola added.
These realignment plans are aimed at adjusting Wärtsilä’s Marine Solutions business to be able to efficiently respond to the needs of its various customer segments.
Currently, Wärtsilä Marine Solutions employs 7,217 people globally.