Enphase says it plans to let go of 10% of its employees, in addition to shutting down contract manufacturing in the United States and Romania.
From pv magazine USA
Enphase Energy, a distributed energy solutions provider, has filed a statement to the US Securities and Exchange Commission outlining plans to restructure and consolidate its business. The company said the moves are designed to increase operational efficiencies, reduce operational costs, and better align its workforce with current market conditions.
Macroeconomic conditions like high interest rates and policy changes like California’s NEM 3.0 have pushed down demand for residential solar in 2023, weighing on the share prices of Enphase and its competitors.
The plan calls for a reduction of its global workforce by about 10%, affecting about 350 contractors and employees. It will also cease operations at contract manufacturing locations in Romania and in the state of Wisconsin.
“We are looking to cut expenses further by consolidating facilities across our worldwide sites to reduce our real-estate footprint, minimizing capital purchases and … extending the hiring and travel freeze through 2024,” said Chief Executive Officer Badri Kothandaraman.
The filing said the company will focus on manufacturing with its two existing partners in South Carolina and Texas. Once these two sites are have fully ramped production, Enphase expects to have a global production capacity of 7.25 million microinverters per quarter, about 5 million of which will be manufactured in the United States.
Overall the restructuring is expected to reduce the company’s manufacturing capacity from 11 million units per quarter to about 7.25 million, with US capacities remaining flat.
“Over the last few months, we have made significant efforts to reduce our operating costs, but we have more work to do to right-size our operations and become leaner and more efficient,” said Kothandaraman.
The company expects to incur about $16 million to $18 million in costs from the restructuring, most of which will be incurred in the fourth quarter.
“Our focus in the first half of 2024 will be on clearing the excess inventory in the channel worldwide,” said Kothandaraman. “However, we see that there is greater confidence in the US Federal Reserve cutting the interest rate next year, and we hope this leads to growth in the back half of the year.”
Raghu Belur, co-founder and chief products officer for Enphase told pv magazine USA in a exclusive interview that he expects 2024 to be a year of recovery for residential solar.
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Source: pv magazine