Danish wind power company Vestas is set to let almost 600 of its employees go in Denmark and Germany.
A total of 590 jobs are to be cut by the company, including 90 at its factory at Lem near Ringkøbing and 500 at the factory at Lauchhammer south of Berlin.
The company confirmed the redundancies in a press statement.
The jobs cuts are a result of production moving to other parts of Europe due to customer demand for different types of wind turbine, the company said.
Vestas director of operations Jean-Marc Lechêne said in a press statement that the wind power firm needed to adapt its costs to the demand for windmills.
“This is a very competitive industry and fast transitions in energy [towards renewable energy, ed.] mean that we must introduce new products and solutions where and when the market demands them,” Lechêne said.
A fall in prices and near collapse in the German market are among factors forcing Vestas to make the jobs cuts, according to Jacob Pedersen, a head analyst with Danish bank Sydbank who closely monitors the industry.
“Prices are significantly lower than they were just two years ago. That’s why there’s a need to be very careful about costs,” Pedersen said.
“When you can see that some of the products being made at factories are no longer in as high demand, while at the same time factories are located in markets that are smaller than before, you have to make cuts,” he added.
Vestas’ announcement comes after competitor Siemens Gamesa also announced it would be releasing 600 staff in Denmark, with people in Aalborg and Brande particularly affected.
Pedersen called the trend “natural”, with costs of production abroad lower than in Denmark.
“There’s no doubt that Denmark faces a challenge with production staff being more expensive than in many other countries, even though they are also very good,” he said.
“So I find it difficult to envisage new production jobs (in Denmark) being created in the future,” he said.
In its press statement, Vestas stressed that the Lem facility would remain in use as a centre for development of new windmill blades.