About 270 of the job losses will be in Finland. The company said that these cost cutting measures were aimed to save €50 mill annually.
The company said its decision to realign the organisation, operations and resources will mainly affect personnel in marine and energy solutions. Wärtsila’s intention is to concentrate more of the engine-related R&D activities to Finland with the aim of reducing development cycles.
The savings are set to kick in gradually from the second quarter of 2016, and will take full effect by the end of 2017, Wärtsilä said.
“We have seen market conditions weakening in our equipment businesses. Despite the somewhat improved sentiment in the power generation markets, the competitive environment remains tough. Furthermore, the combined effect of overcapacity of merchant ships, and a continued lack of demand in the offshore segment, caused vessel contracting to decline in the first quarter,” Jaakko Eskola, President & CEO, Wärtsilä Corp explained.
Wärtsilä’s results for the first quarter of this year showed a slight decrease in net sales to €967 mill. The group’s profitability was stated as 8.7% down from 10.1% recorded in the first quarter of 2015.
In addition, Wärtsilä’s order intake also fell to €1,271 million, compared to €1,285 mill in 1Q15.
In 2016, the cost-cutting measures are expected to garner a growth in net sales of 0-5%. Wärtsilä also forecast its profitability for the current year to be 12.5-13%.