Norway's New Havyard Ship Technology is quitting the newbuilding sector for the time being in depressed markets.
The company is also calling for more government help for yards to win green vessel orders.
The Havyard Group shipbuilder, which is controlled by the Saevik family, will downsize operations in Leirvik by cutting staff and focusing on ship repair and service work instead.
A meeting was held at the yard in Leirvik on 5 November to tell staff of the changes.
Havyard Group chief executive Gunnar Larsen said the decision was a difficult one because management knows how important the yard is "both to the individual employees and the region".
"But the strategy of becoming a service and repair yard is absolutely necessary to keep as many jobs as possible," he said.
Challenging times
Larsen added that the market for newbuildings, and the possibilities of obtaining funding for them, will remain challenging.
At the same time, he said the service segment is healthy and profitable.
"New Havyard Ship Technology must therefore restructure its operations to repairs, service and maintenance," Larsen said. "The yard’s facilities, expertise and location mean that we are in a good position to be a reliable provider to customers in this market as well."
New Havyard Ship Technology emerged from the ashes of Havyard Ship Technology earlier this year, following a bankruptcy process.
The plant was then closed from 2 to 19 October by a Covid-19 outbreak among 91 workers.
The Norwegian shipbuilding sector as a whole has been undergoing major change this year.
In July, struggling Kleven Verft found a new buyer after filing for bankruptcy restructuring under the ownership of Croatia's DIV Group.
Compatriot ship recycler Green Yard agreed to take over the Ulsteinvik plant after a deal was reached with its trustee and banks who had pulled the plug on the company in June.
And last month, the controlling family of Norwegian shipbuilder and designer Ulstein Group completed its move away from the operational side of the business to focus on its future direction.
After almost 22 years as chief executive, Gunvor Ulstein stepped down and handed over the reins to chief financial officer Cathrine Marti.
Larsen said the domestic yard industry is facing serious problems, and called for more measures to facilitate shipbuilding.
'Not good enough'
"The measures notified by the authorities are not good enough to secure Norwegian yard jobs," he said.
"More measures with more immediate effects in relation to transitioning to environmentally-friendly shipping would help both the Havyard yard, which is a market leader in green technology, and the Norwegian maritime industry as a whole."
Switching to repair work will mean a loss of 100 jobs in 2021.
New Havyard Ship Technology general manager Erlend Hatleberg said: "We know that this is difficult for the people affected, but we are doing it to save as many jobs as possible.
"We are in close dialogue with the employee representatives and will take steps to make this difficult process as smooth as possible."
Six ships still to build
New Havyard Ship Technology has six newbuildings scheduled for completion in 2020 and 2021, on which work will continue.
These include a platform supply vessel for Atlantic Towing and a car and passenger ferry for another Saevik company, Fjord1.
In May, New Havyard Ship Technology financed the remaining ships in its orderbook in a deal with banks and shipowners.
Hatleberg also said the group is not completely ruling out new orders in the future.
"We have newbuild expertise and experience of upscaling and downscaling the yard in line with demand," he said.
"Therefore, newbuilds may be an option in future. But, for now, we will primarily concentrate on adding a new string to our bow: repairs, maintenance and modification."
