May 14, 2009
Massive job cuts at Wärtsilä
Wärtsilä Corporation is to slash 400 to 450 of the 1,300 jobs in its ship power division. About 80 of the job cuts will be in Finland.
The cuts come in response to a market situation that has seen the division's order intake plummet to €135 million in the first four months of this year--an 86 percent drop on the equivalent period last year. Adding to the misery, the first four months of the year saw the cancellation of existing orders worth €75 million.
As we reported last month, Wärtsilä sees a potential risk of further Ship Power order cancellations amounting to approximately €1,000 million
"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," says Jaakko Eskola, Group VP, Ship Power. "As the market outlook continues to be very challenging, we must find cost-saving measures that ensure the Ship Power organization's ability to maintain its competitiveness and efficiency, while at the same time, not jeopardizing customer commitments."
Wärtsilä is starting the formal process of reorganizing the division today. Negotiations will affect all of Wärtsilä Ship Power's personnel in all functions globally. The main disciplines in the division, which has operations in some 30 countriesm are sales, project management, engineering services and ship design.
In taking these measures, Wärtsilä is hoping for annual savings of approximately €30 million. The effect of the savings will start to materialize gradually from the second part of 2009, and will take full effect by the end of 2010.