The weak oil market is causing a restructuring at Wärtsilä’s Ship Power business that will result in rebranding the company and a loss of 600 jobs that will ultimately save Wärtsilä approximately US$43 million (EUR 40 million) annually.
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Image from Wärtsilä. |
Wärtsilä Corp. is renaming its Ship Power business to Wärtsilä Marine Solutions in an attempt to realign its organization, operations and resources in response to the sluggish global marine market situation, the company said. The move will also affect personnel, causing a reduction of approximately 600 jobs in Wärtsilä Marine Solutions' global operations.
In taking these measures, Wärtsilä says it will endure an annual savings in the region of $43 million (EUR 40 million). Effects will begin to materialize gradually, beginning from 3Q 2015, taking full effect by the end of 2016. The non-recurring costs related to the restructuring measures will be approximately $27-32 million (EUR 25-30 million), the company said.
Approximately 160 of those jobs will be in Finland, and a portion will be through retirements. Currently, Wärtsilä Marine Solutions employs 7217 people globally.
According to Wärtsilä, the effects of the adjustments to Wärtsilä Marine Solutions will be specified when the consultation processes are initiated in the affected countries according to local practices and legislation.
"The marine industry has been slow in recovering from the global economic crisis and new shipbuilding contracting is weak. At the same time, the offshore oil & gas industry has been adversely affected by lower oil prices. In addition, there are risks related to vessel owners negotiating extensions to existing delivery contracts. The combined impact of these developments has created a challenging market situation for the entire marine sector. These unfortunate capacity adjustments have to be made in this current environment of low demand in order for us to maintain our competitive position in the global market. Despite streamlining the organization, our commitment to our customers remains absolutely solid," said Jaakko Eskola, president, Marine Solutions, senior executive VP, Wärtsilä Corp.
Wärtsilä adds to a growing list of oil and gas companies to cut jobs this year including: UK-based Ophir Energy; Norwegian companies Statoil, EMGS, Aker Solutions; and Houston-headquartered FMC Technologies, to name a few.
Read more:
Ophir to shut offices, cut staff
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