In a statement issued Thursday Finnish power and marine systems company Wärtsilä blamed weakened profitability on its decision to cut 550 jobs, 270 of them in Finland.
The company said that it will begin restructuring its organisation, operations and resources, due to a weak market situation and difficult competitive environment.
Since the beginning of the year Wärtsilä has also been troubled by reduced deliveries of its power systems and downward pressure on prices for power production.
The plans to respond to the changing market situation will especially affect staff working for the company’s Marine Solutions and Energy Solutions business units.
Finland to be focus of power systems development
Wärtsilä said that it wants to shorten the design cycle for its products and aims to concentrate power systems development in Finland.
The company is hoping that the restructuring plan will help it save some 50 million euros annually. The savings plan will be implemented in phases starting from the second quarter of this year, and should be fully online by the end of 2017, the statement said.
Globally, Wärtsilä currently employs just under 6,700 workers in its Marine Solutions division and another 960 in the Energy Solutions unit. The company said that the proposed changes will become clearer once it begins job reduction discussions in different countries.
Last November Wärtsilä announced that it would send home some 110 permanent employees from the Marine Solutions division due to the sluggish market situation.
Declining financial performance since 2015
The Wärtsilä Group reported a slight, year-on-year decline in revenues for the first quarter, posting 967 million euros in turnover. Operating profit for the period declined dramatically by 16 percent to 84 million euros compared to one year earlier. However it reported a three-percent increase on the order books, representing some 5.1 billion euros.
Group President and CEO Jaakko Eskola said that the market for maintenance services was expanding steadily and that demand was strong for electrical and automation systems. The company has estimated that revenues for the entire year will grow by zero to five percent compared to 2015.