Wärtsilä to Cut 1,000 Employees

wartsilaAfter a year “impacted by the continued uncertainty in the global economy,” Wärtsilä CEO Björn Rosengren has announced today the company will be reducing their headcount by 1000 employees globally, 200 of which will be from their corporate headquarters in Finland. At the end of 2013, Wärtsilä had 18,663 employees in nearly 70 countries globally.

“In an environment of slow growth and intense competition, we must take steps to adjust our cost structure accordingly. Only by increasing the efficiency and flexibility of our organisation globally can we secure profitability and maintain competitiveness going forward. Unfortunately redundancies cannot be avoided,” added Rosengren in an emailed statement.

With these layoffs, Wärtsilä seeks annual savings in the range of EUR 60 million.

All-in-all though, 2013 wasn’t a bad year for Wärtsilä with only a 1 percent drop in their orderbook as compared to the year before and they actually gained a bit on their earnings per share from EUR 1.72 in 2012 to EUR 1.98 at the end of 2013.

Market Outlook

Wärtsilä seems generally optimistic for the immediate future noting “the main drivers supporting activity in the shipping and offshore sectors are in place” and that signs of improvement can be found in the global economy.

Furthermore, the company notes:

The current oil price level supports activity in the offshore industry, including operations in harsh and deep water areas. The importance of fuel efficiency and the regulatory environment are clearly visible, and the interest in gas as a fuel is increasing. Overall contracting is expected to remain at improved levels, keeping in mind the prevailing overcapacity and the market’s limited capacity to absorb new tonnage. Due to the relatively high level of contracting in the traditional merchant segment during 2013, a small downturn in merchant ordering activity may be seen in 2014.