Finnish engineering company Wärtsilä plans to let go 600 employees from its Marine Solutions department, despite an increase in overall net sales and order intake in the first six months of 2015.
Wärtsilä announced the planned job cuts in its Interim Report for 1HFY2015, describing the move as ” a response to the sluggish global marine market situation.”
In taking these measures, Wärtsilä seeks annual savings in the region of EUR 40 million.
The overall outlook for the shipping and shipbuilding markets is challenging, the company says in the report. Low oil prices continue to impact investments in exploration and development, thereby limiting the demand for offshore drilling and support vessels.
Overcapacity affects the demand for vessels, particularly in the dry bulk and offshore markets. Increased scrapping, together with a more balanced fleet growth, supports a gradual recovery in the freight market, says Wärtsilä.
The company’s order intake increased 8% to EUR 2,44 billion (EUR 2.25bn in 1HFY2014), while net sales increased 5% to EUR 2,22 billion (EUR 2,11bn in 1HFY2014).
Wärtsilä’s order book at the end of the period increased 20% to EUR 5,33 billion (EUR 4,42bn in 1HFY2014).
”The marine markets continue to suffer from weak vessel demand caused primarily by overcapacity, depressed freight rates, and low oil prices. Marine Solutions’ order intake was on a good level despite the challenging market conditions. Still, we must ensure our future competitiveness in a low demand environment. Consequently, we have today announced plans to realign our Marine Solutions organisation,” said Björn Rosengren, Wärtsilä’s President and CEO.