Orsted Slashes Workforce by 25% Amid Declining Wind Power Prospects

Orsted, the leading Danish renewable energy developer, has announced a significant workforce reduction amid challenging conditions in the offshore wind sector. The company will cut approximately 2,000 jobs, translating to a 25% reduction in its workforce over the next two years.

Challenges Facing Offshore Wind Sector

Offshore wind farms, once viewed as a promising low-emission technology, are facing several hurdles. Orsted’s Chief Executive, Rasmus Errboe, noted the difficult decision to let go of many skilled employees, citing the current economic landscape as a major factor.

Economic Pressures and Political Climate

The offshore wind industry is grappling with various challenges, including:

• High inflation rates
• Increased interest rates
• Political opposition, particularly from the Trump administration, against offshore developments

These elements have resulted in diminished profitability for companies like Orsted. Deepa Venkateswaran, a utility analyst at Bernstein, emphasized that recent changes have significantly impacted Orsted’s ambitions.

Future of Orsted’s Projects

Once poised for expansive growth, Orsted is now shifting its focus. The company plans to conclude its current construction projects, which require fewer employees moving forward. Notably, the Revolution Wind project off Rhode Island was partially halted due to political actions but has recently received permission to resume work.

Initiatives to Stabilize the Company

To navigate these issues, Orsted has raised over $9 billion from shareholders, including the Danish government, which holds a majority stake in the firm. Despite these efforts, Orsted’s stock has depreciated by nearly 50% in the past year.

Workforce Projections

Orsted currently employs about 8,000 individuals globally. Following the reductions, this number is expected to drop to approximately 6,000 by the end of 2027. The company plans to achieve this reduction through:

• Attrition
• Sale of business units
• Outsourcing
• Redundancies

In the near term, around 500 employees will be laid off in the current quarter. As Orsted adapts to the evolving energy landscape, its future projects remain uncertain, particularly in the United States.