Enphase Energy to lay off 17% of workforce, take up to $20 million in charges

5:59 pm Friday, November 08th, 2024

(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 operations amid slowing residential solar demand.

The company, which has been grappling with a deteriorating market for residential solar in Europe, will focus contract manufacturing in four existing locations – two in the US, one in India and one in China. The company will cease its contract manufacturing operations in Guadalajara, Mexico, it added.

Enphase’s shares have fallen close to 50% so far this year, with demand for its services weighed down by lower electricity prices and greater competition in key markets such as the Netherlands and Germany.

Enphase will incur about $17 million to $20 million in restructuring and asset impairment charges, of which about $14 million would be in the fourth quarter of 2024. The total cash expenditures would be about $11 million to $12 million.

The latest move comes after the company unveiled previous job cuts in December last year, when Enphase said it would reduce its global workforce by about 10%, impacting about 350 contractors and employees.

“The ongoing challenges from a tough 2023 solar market 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 U.S. 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.”

Enphase said its adjusted operating expenses in the fourth quarter are expected to increase as a result of restructuring plan.

The company expects to reduce its adjusted operating expenses to a range of $75 million to $80 million a quarter in 2025.

It expects to substantially complete these restructuring actions by end of the first quarter of 2025.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shailesh Kuber)