By Mark Chediak | Bloomberg
SunPower Corp. will eliminate more than 25% of its workforce as the company copes with a prolonged slump in the rooftop solar business.
SunPower will cut about 1,000 out of a total of about 3,800 employees, according to a spokesperson.
The company plans to shutter its residential installation locations and close its direct sales unit as it pivots to a “low-fixed-cost model,” SunPower’s Principle Executive Officer Tom Werner wrote in a note to employees posted on the company’s website Wednesday.
The company expects to incur restructuring charges of about $28 million, according to a filing. After rising as much as 6.6%, SunPower shares surrendered those gains and were trading down 2.3% at 12:23 p.m. in New York.
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The announcement comes a day after SunPower said it needs to restate almost two years of financial results, part of a string of difficult news for the solar-industry pioneer. The company replaced its top executive earlier this year and defaulted on a credit agreement in late 2023 after an earlier earnings revision that delayed results. SunPower had to raise $200 million to ease a cash crunch. It announced a prior restructuring plan in January.
The rooftop solar industry has been struggling as high interest rates make it more expensive for people to install panels. California, the biggest solar market, cut payments to homes and businesses that sell excess solar power back to the grid, a move that left the industry reeling. About two-thirds of household solar installers in California, where SunPower is based, are struggling to generate enough sales to say afloat.
“While we worked hard to avoid this outcome, the market has been slower to recover than we initially expected,” Werner wrote in the note to employees.
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