Wärtsilä Corporation will initiate a formal process to realign its operations and resources to secure future profitability and competitiveness. The Group-wide program emphasises sustainable savings and actions that increase customer value in an effective way. The planned actions include an increased focus on targeted sales activities, developing the agreements-based and “as-a-service” business, reviewing the cost structure, as well as optimising the business portfolio and organisation.
The program is expected to lead to a reduction of approximately 1.200 employees globally. The reductions will impact all businesses and support functions.
With these actions Wärtsilä seeks annual savings of EUR 100 million. Savings are expected to materialise gradually during the second half of 2019, with full effect by the end of 2020. Furthermore, this programme enables increased sales and stability for business operations. The costs related to the restructuring measures are expected to be EUR 75 million.
“The business environment around us is changing with increasing speed. Trade tensions, geopolitical uncertainty, and market volatility are sources of concern. 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. This is a painful decision, but redundancies cannot unfortunately be avoided,” says Jaakko Eskola, President & CEO.
The planned reductions are subject to consultation processes, which will be initiated in the affected countries according to local practices and legislation. The company will provide support and consultation, as well as assistance in re-employment in the impacted countries.
At the end of 2018, Wärtsilä had approximately 19.300 employees in more than 80 countries around the world.