SunPower to reduce global workforce by 25% as part of restructuring initiatives

A woker inspects a solar panel prior to installation - image courtesy of SunPower
A woker inspects a solar panel prior to installation - image courtesy of SunPower.

One of the worlds most innovative and sustainable energy companies is set for a major restructure which will include reducing its global workforce by 25% as it looks to position itself for long term sustainable growth.

SunPower has announced it will undergo a broad restructuring program as it looks to remain an energy powerhouse in the 21st century.

To achieve this objective of positioning itself for long term sustainable growth, the second-biggest solar panel-maker in the US is implementing initiatives which will see a quarter of the company’s global workforce of 10,000 workers lose their jobs.

Another initiative will see the closure in February of its 700 megawatt nameplate capacity Fab 2 in the Philippines as a means of rationalizing capacity to balance production with near-term profitable demand.

SunPower will also reduce its 2017 annual operating expenses to less than $350m and reduce its annual 2017 capital expenditure by more than 50% to approximately $100m.

As it looks to position itself for long term sustainable growth, Sun Power will also continue to invest in next generation cell and module technology as well as complete solutions.

As a result of these initiatives, SunPower expects to incur total restructuring charges of $225m to $275m through the end of 2017 of which approximately 30% will be in cash.

SunPower president and CEO, Tom Werner, said these initiatives were imperative if the energy company was to achieve sustained long term profitability.

“As we announced in our third quarter 2016 earnings release, given the current market dislocation, we have made the strategic decision to implement a broad restructuring program to position the company for sustained, long-term profitability,” he said.

“We believe that our restructuring initiatives will enable us to successfully navigate through the current market transition and maximise cash flow while successfully positioning the company for the next phase of industry growth.”

SunPower announces job losses

SunPower’s restructuring initiatives and subsequent loss of one quarter of its workforce comes at a time when increased worldwide panel production has flooded the industry and subsequently driven down prices by 31% this year.

And with demand expected to decline next year in the world’s biggest solar market China, global panel installations are expected to increase at their slowest pace in at least a decade.

In keeping with this negative outlook for the industry in 2017, SunPower has guided for adjusted revenues of between $2.1bn to $2.6bn for 2017, marking a decline of roughly 9% at the midpoint, versus its 2016 projections.

The figure also comes below analyst’s average estimate of $2.7bn.

Despite the expected downturn in the solar panel industry in 2017, SunPower expects solar prices, which have declined by over 25% during the third quarter of 2016, to stabilize towards the end of 2017 with the company projecting declines of 5% to 10%.

For the 2017 fiscal year, SunPower expects to end the year with approximately $300m in cash due to positive cash flow from next years operations.

SunPower also announced this week that New Energy Solar has acquired a substantial majority interest in two large-scale solar projects, totalling over 134 megawatts (MW), that SunPower developed, designed and constructed in Kern County, California. SunPower will retain an ownership interest in the projects, which each having a capacity of 67.4 MWs, and provide ongoing operation and maintenance services.