Ørsted, one of the world’s largest developers of offshore wind energy, recently announced a $2.5 billion restructuring plan. This $600 million plan includes eliminating about 2,000 positions by 2027. At face value, this decision makes sense with the company’s new business strategy. Further, it places a heavy focus on raising capital investments to develop their offshore wind portfolios, particularly in Europe and key Asia-Pacific markets. The firm plans to phase in layoffs over the coming years. Beyond Q4 2025, capacity is expected to be cut in about 500 jobs.
Ørsted has recently completed a financial package of T$90 billion. The funding will continue to advance the construction of the Greater Changhua 2 offshore wind farm in Taiwan. This tactical investment highlights Ørsted’s commitment to growing its offshore wind portfolio and at the same time making its operations more lean.
Job Cuts and Their Implications
Those anticipated workforce reductions stem from a forecast decline in construction work. This increase comes just as a wave of offshore wind projects are set to be finished. Ørsted expects all of these changes to result in annual cost savings of close to DKr2 billion. This is about the present value of $309 million and starts in 2028. Additionally, as a result of this restructuring, roughly 235 positions will be cut with most of those in Denmark.
Ørsted CEO Rasmus Errboe went on to discuss the difficulties this decision poses for the company and its workforce.
“Today, we’ve told our employees that from now and until the end of 2027, we’ll be saying goodbye to many skilled and valued colleagues who’ve contributed greatly to Ørsted.” – Ørsted CEO Rasmus Errboe
Errboe acknowledged that the company does not take such layoffs lightly. As meaningful as they are, they are absolutely critical for Ørsted to be able to pivot to new business realities.
“However, this is a necessary consequence of our decision to focus our business and the fact that we’ll be finalising our large construction portfolio in the coming years – which is why we’ll need fewer employees.” – Ørsted CEO Rasmus Errboe
Strengthening Focus on Offshore Wind
As Ørsted moves deeper into offshore wind, the company clearly wants to continue its ambitious run at the top of the sector. Alongside this, the company will run its Danish combined heat and power plants, while focusing its efforts on offshore wind projects.
In her closing remarks, Ørsted’s Errboe promised stakeholders that Ørsted was committed to building the future of renewable energy.
“We’re committed to maintain our position as a market leader in offshore wind, and we need to ensure that offshore wind becomes a key element of Europe’s future energy mix and green transition.” – Ørsted CEO Rasmus Errboe
By refining its operations and reducing workforce size, Ørsted aims to create a more efficient and flexible organization capable of competing for new offshore wind projects that add value.
Future Outlook
On the horizon, Ørsted is looking to lock in the rest of its large construction portfolio over the next few years. The engineering and construction company says the combined changes will improve its agility to capitalize on accelerating market opportunities such as renewable energy.
As the transition unfolds, Ørsted’s strategic decisions reflect a broader trend within the industry towards sustainable energy sources, paving the way for continued growth in offshore wind development.