Ørsted to cut up to 800 jobs and exit some offshore wind markets

Courtesy: Splash 247

COPENHAGEN: Danish offshore wind giant Ørsted is cutting jobs and exiting several markets after a “substantially challenging” 12 months and massive impairments and additional costs related to its US offshore projects.

Ørsted said Wednesday it would withdraw from markets in Norway, Spain, and Portugal and cut as many as 800 jobs to reduce risks and “become a leaner and more efficient organisation”.

The move follows the termination of Ocean Wind 1 and Ocean Wind 2 offshore wind projects, the decision to reposition the Skipjack Wind project, and to primarily focus its US offshore portfolio towards the North-East Atlantic.

Project development in Japan will also be deprioritised with plans for a leaner development within floating offshore wind and power-to-x, to reduce costs and create further strategic market focus, Ørsted said.

Project cancellations and phasing of capex across the portfolio is expected to result in about $5bn of relief in 2024-2026. Farm-downs and divestment programmes are also set to speed up with targeted proceeds of about $16.5bn towards 2030, of which some $10bn-$11.5bn are estimated in the next two years.

The company said it expects a reduction of between 600 and 800 positions globally. Not all reductions will result in redundancies, but about 250 people will leave Ørsted within the coming months. Chairman Thomas Thune Andersen will be stepping down at the upcoming annual general meeting in March.

Ørsted currently has a renewable installed capacity of 15.7 GW and this is expected to increase to about 23 GW by 2026. However, the challenging market over the past few years has now forced the company to downgrade its renewable capacity target from 50 GW to 35-38 GW by 2030.