On Wednesday, SunPower announced its intention to undertake a restructuring aimed at cost reduction, which includes job cuts and the closure of certain business segments. This move led to a 3.5% increase in the solar power generation company’s shares amid volatile trading.
SunPower revealed plans to reduce its workforce by approximately 1,000 employees over the next few days and weeks. Additionally, it will wind down operations at its SunPower Residential Installation sites and cease SunPower Direct sales.
With 4,710 full-time employees globally as of January 1, 2023, SunPower expects charges of about $28 million related to expenses such as severance benefits, early contract terminations, and specific write-offs.
The company attributed the decision to the slower-than-expected recovery in demand across markets and outlined its shift towards a low fixed-cost model to enhance resilience against market fluctuations.
Companies in the solar power and storage sector have faced challenges, including increased inventory levels and metering reforms in California, which have dampened demand.
The metering reform resulted in reduced tariffs for residential customers receiving power from the grid, impacting demand for solar installations.
SunPower aims to complete its restructuring plans by the second quarter, aiming to simplify its business structure, phase out unprofitable operations, and strengthen financial controls, as highlighted by Principal Executive Officer Tom Werner in a letter to employees.
