Enphase Energy will lay off up to 17% of its workforce and take charges up to $20 million
Enphase Energy announced on Friday that it will reduce its global workforce of about 17%. This will affect about 500 employees and subcontractors. The solar inverter manufacturer is reducing operations due to a slowdown in residential solar demand.
The company will concentrate contract manufacturing at four locations: two in the US and one each in India and China. It added that the company would cease its contract manufacturing in Guadalajara.
Enphase shares have dropped by close to half so far this season, as lower electricity prices in key markets like the Netherlands and Germany and increased competition has impacted demand for their services.
Enphase will incur approximately $17 to $20 million of restructuring and asset impairment charges. Of this, about $14 million would occur in the fourth quarter 2024. Total cash expenditures will be approximately $11 to $12 million.
Enphase announced its previous job cuts last December, when it said that it would reduce the global workforce of about 10% and impact about 350 contractors or employees.
In a message sent to employees and disclosed in a filing with the regulatory authorities, CEO Badri Kouthandaraman stated that "the ongoing challenges of a difficult solar market in 2023 have continued to affect us and our partners in industry throughout 2024."
The industry is characterized by a high level of uncertainty due to a combination of factors, including the decline in demand for residential solar in Europe and the United States due to rising interest rates.
Enphase's adjusted operating costs are expected to rise in the fourth-quarter as a result if its restructuring plan.
The company anticipates reducing its operating expenses by $75-80 million per quarter between 2025 and 2035.
The company expects to complete the restructuring by the end of first quarter 2025. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber)
(source: Reuters)
