Finnish manufacturing company Wärtsilä is set to layoff nearly 1,200 employees across its global locations as part of a move to realign its operations and resources to gain profitability and competitiveness in the future.
The reductions will affect all businesses and support functions, said Wärtsilä, which provides technologies and equipment for the energy sector.
The company said that the planned layoffs will be based on consultation processes, which will be started in the impacted countries as per local practices and legislation.
Wärtsilä plans to offer support and consultation and also assistance in re-employment in the affected countries.
The company reported to have nearly 19,300 employees across more than 80 countries at the end of last year.
The Finnish company has initiated a group-wide program with a focus on generating sustainable savings and actions aimed at improving customer value in an effective way.
Included in the planned actions are an increased focus on targeted sales activities, growing the agreements-based and “as-a-service” business and relooking into the cost structure. The company will also be looking to streamline the business portfolio and organization.
Through the actions, Wärtsilä is targeting €100m of annual savings, which are anticipated to gradually materialize during the second half of this year, with full effect by the end of next year.
The Finnish firm believes that the program will give scope for increased sales and stability for business operations. The company expects to incur €75m in costs associated to the restructuring steps.
It has cited trade tensions, geopolitical uncertainty, and market volatility as reasons for its planned redundancies and restructuring.
Wärtsilä president & CEO Jaakko Eskola said: “We have performed reasonably well in the prevailing market environment, thanks to our Smart Marine and Smart Energy strategies.
“Nevertheless, we must constantly strengthen ourselves to cope with current and future developments. To maintain our leading position in the market, and to stay strong, agile, and competitive, it is fundamentally important to continuously streamline our operations and align them to market requirements.”
Wärtsilä separately reported that its net sales for the fourth quarter of 2018 increased 6% to €1.53bn while its order intake for the same time period increased 24% to €1.87bn compared to the same quarter in 2017.