23 August 2012, 09:01 BST
Denmark-based Vestas Wind Systems (CO: VWS), the world's largest turbine manufacturer is preparing to cut another 1,400 jobs in anticipation of the year-end expiration of the US wind production tax credit (PTC).
The measures are meant to save upwards of $311 million as the company prepares for a difficult 2013.
Vestas announced in January that it would eliminate up to 2,335 green wind jobs, and the additional cuts signal that the company is bracing for a slowdown of US projects if the wind credit is not extended.
"The further reduction in the workforce is part of the continued cost saving plans which Vestas has been working on since November 2011," says Ditlev Engel, CEO of Vestas. "It is always unfortunate to have to say goodbye to good colleagues in Vestas, but we have said before that 2012 will be tough and 2013 will be even tougher for Vestas, and in order to reach our target of making 2013 profitable, it is unfortunately a necessity."
The additional reductions would bring the company's worldwide workforce to about 19,000 people, rather than an earlier target of 20,400 workers.
In addition, Vestas is reducing its turbine shipment forecast for 2012 to about 6.3 gigawatts (GW), down from 7 GW.
Engel had warned back in June that the expiration of the wind tax credit could result in an 80% drop-off in US projects in 2012.
The company still expects to hit its projects for 2012 revenue of between $8.1 billion and $9.9 billion. But the company is preparing for turbine shipments of about 5 GW next year, Engel told Reuters.
Vestas spent more than $1 billion on four factories in Colorado and has more than 3,000 employees across the US. It also has a sales office in Portland, Oregon, and research and development centers in Texas and Massachusetts.
182 US jobs were eliminated and last week Vestas said about 20% of the 450 jobs at a factory in Pueblo, Colorado, are among the ones that will be cut.
As many as 37,000 US jobs could be lost if the credit isn't renewed, according to the American Wind Energy Association (AWEA).
Wind-generated electricity contributed about one-third of the new capacity added to the US grid last year, which makes the PTC expiration all the more troublesome and short-sighted.
Aside from the Vestas cuts, the wind tower maker DMI Industries Inc. of Tulsa, Oklahoma, plans to shut down entirely and job cuts are coming LM Wind Power in Arkansas and Trinity Industries in Texas. Gamesa has also laid off at least 165 US workers.
For more on the anticipated Vestas layoffs: