(Reuters) -Enphase Energy will cut its global workforce by about 17%, impacting about 500 employees and contractors, it said on Friday, as the solar inverter maker streamlines its operations amid slowing demand to solar energy in homes.
The company, which is struggling with a deteriorating residential solar market in Europe, will focus on contract manufacturing at four existing locations: two in the US, one in India and one in China. The company will discontinue its contract manufacturing operations in Guadalajara, Mexico, it added.
Enphase shares are down nearly 50% so far this year, with demand for its services depressed by lower electricity prices and greater competition in key markets such as the Netherlands and Germany.
Enphase will pay approximately $17 million to $20 million in restructuring and asset impairment charges, including approximately $14 million in the fourth quarter of 2024. Total cash expenses would be approximately $11 million to $12 million.
The latest move comes after the company announced earlier job cuts last December, when Enphase said it would reduce its global workforce by about 10%, impacting about 350 contractors and employees.
“The continued challenges of a difficult solar market in 2023 have continued to impact us and our industry partners throughout 2024,” CEO Badri Kothandaraman said in a message to employees, which was disclosed in a regulatory filing.
“A combination of factors – including reduced demand for residential solar in the US due to high interest rates and declining demand in Europe due to policy changes and energy rate adjustments – have contributed to the continued unpredictability in our industry. ”
Enphase said adjusted operating costs are expected to increase in the fourth quarter as a result of the restructuring plan.
The company expects to reduce adjusted operating expenses to $75 million to $80 million per quarter by 2025.
It expects to largely complete these restructuring measures by the end of the first quarter of 2025.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber)
