Enphase to cut 500 jobs amid tough solar market

US solar microinverter and battery systems maker Enphase Energy Inc (NASDAQ:ENPH) on Friday announced a restructuring plan, including cutting jobs and moving certain functions to cost efficient regions, against the backdrop of difficult market conditions.

The plan will impact 17% of its global workforce, or about 500 employees and contractors, the company said in a filing with the US Securities and Exchange Commission. Enphase will focus contract manufacturing in four existing locations, two in the US, one in India and one in China, while ending its contract manufacturing operations in Guadalajara, Mexico.

Enphase’s capacity for microinverters will nevertheless remain unchanged at 7.25 million units per quarter, of which about 5 million units of capacity in the US.

The plan will lead to USD 17 million (EUR 16m) to USD 20 million in restructuring and asset impairment charges, most of which will be incurred in the fourth quarter of 2024.

The Fremont, California-based company announced an initial restructuring plan in December 2023, but the ongoing challenges from a tough 2023 solar market have continued to impact it and its industry partners throughout 2024, CEO Badri Kothandaraman said in a letter to employees. “Many large solar equipment companies and installers have faced significant cash flow issues, with some even filing for bankruptcy,” the CEO added.

“A combination of factors —including reduced US residential solar demand due to high interest rates and declining demand in Europe due to policy changes and utility rate adjustments— has contributed to sustained unpredictability in our industry,” Kothandaraman said.

He added the company’s current non-GAAP operating expenses range between USD 80 million and USD 85 million per quarter, and due to slower revenue growth, it aims to reduce them to between USD 75 million and USD 80 million. The company expects to achieve that when the restructuring actions are substantially complete by the end of the first quarter of 2025.

(USD 1 = EUR 0.939)

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