Enphase Energy layoffs will impact 10% of its global workforce, CEO Badri Kothandaraman disclosed in a letter to employees at the solar energy technology company.
The Enphase Energy layoffs will impact roughly 350 contractors and employees. The job cut news surfaced the same day that SunPower -- another solar energy company -- warned that its business may not survive in its current form.
Why Did Enphase Energy Experience Layoffs?
The solar market has "seen a lot of turbulence worldwide" over the past 12 months, Enphase Energy's Kothandaraman wrote in his message to staff. Among the challenges: High interest rates in the United States and Europe pressured customer demand, and California's NEM 3.0 transition created further uncertainty in the solar market, Kothandaraman wrote.
NEM 3.0, short for Net Metering 3, triggered reduced solar incentives for rooftop customers in California. Coupled with high interest rates, NEM 3.0 triggered a solar market meltdown in California by mid-2023.
Amid that backdrop, Enphase Energy will now cut staff and:
- Cease contract manufacturing operations in two locations—Timisoara, Romania and Wisconsin, United States;
- resize other contract manufacturing sites; and
- continue a hiring freeze and travel freeze through 2024; and
- cut discretionary spending on several other fronts.
The changes will trigger roughly $16 million to $18 million in restructuring and asset impairment charges, the company said. Most of the changes should be completed in the first half of 2024. Enphase Energy expects to save $75 million to $80 million per quarter in 2024 once the changes are completed.
SunPower Business Challenges
Meanwhile, SunPower's stock on December 18, 2023 fell 31% after the solar energy company said it may not survive recent business turbulence.
According to a SunPower SEC filing: the company violated a financial covenant when it failed to deliver Q3 2023 financials in a timely manner. As a result, SunPower could be on the hook for an immediate acceleration of debt -- which would be equal to approximately $65.3 million, the SEC filing said.
Renewable Energy Stocks -- A Challenging Year, But: Solar, wind and electric-vehicle (EV) charging stocks declined most of 2023 amid high interest rates -- which made renewable energy infrastructure projects especially costly to finance. As a result, multiple clean energy companies experienced layoffs in 2023.
Renewable Energy: Signs of Hope for 2024?
Still, the Wilderhill Clean Energy Index rose as much as 14% in mid-December 2023 as investors cheer the possibility of a soft landing for the U.S. economy, and potential interest rates cuts in 2024, Bloomberg reported.
Meanwhile, demand for green jobs in the United States has grown roughly 50% since 2019, according to Lightcast. In response, companies such as Accenture, EY, Goodwill and Microsoft have launched green jobs training programs.