Enphase Energy’s Job Cuts and Other Reductions in a Challenging Environment

News Summary

Enphase Energy Inc. will cut 10% of its workforce and reduce other costs as it faces a “challenging economic environment.” The CEO of Enphase stated that high-interest rates and a change in California law that reduced compensation for owners feeding into the grid have impacted the solar energy market. Enphase will also streamline operations by discontinuing contract manufacturing at two locations.

News Details

Enphase Energy Inc. (ENPH) is reducing jobs as it stated it faces a “challenging economic environment.” In a regulatory report on Monday, the company’s CEO, Badri Kothandaraman, announced that Enphase is laying off 350 contractors and employees, or 10% of its workforce. Additionally, the company said it is “streamlining our operations” by ending contract manufacturing in Wisconsin and Timișoara, Romania. The CEO indicated that Enphase will continue to freeze hiring and travel until next year and will “reduce discretionary spending in many areas.”

Kothandaraman mentioned that the solar energy market has experienced “a lot of disruptions” over the past year. High-interest rates have significantly reduced demand for solar energy products, and he noted that the industry has also been affected by changes in California law, the largest solar market in the United States, which lowered compensation for owners feeding electricity into the grid.

While the company has made substantial efforts to reduce operating costs over the past few months, Kothandaraman said: “We have more work to do to scale our operations and achieve efficiency and effectiveness.” He added that the layoffs and other cost-cutting measures will result in structural costs and one-time asset impacts ranging from $16 million to $18 million.

Employees who lost their jobs in the United States will remain on payroll until January 5, while employees outside the United States will follow separate procedures according to the countries in which they are located, the company revealed.

Shares of Enphase Energy rose more than 7% on Tuesday, even though they remain down about 50% from last year.

Source: https://www.investopedia.com/enphase-energy-slashes-jobs-and-makes-other-cuts-in-a-challenging-environment-8417887