On Sunday, SolarEdge Technologies (SEDG.O) revealed plans to lay off approximately 16% of its global workforce in a strategic move aimed at reducing operating costs. The decision comes in the wake of the company’s recent actions, including the discontinuation of manufacturing operations in Mexico, a reduction in manufacturing capacity in China, and the termination of its light commercial vehicle e-mobility activity.
In a statement, CEO Zvi Lando explained the challenging yet necessary nature of the decision, stating, “We have made a very difficult, but necessary decision to implement a workforce reduction and other cost-cutting measures in order to align our cost structure with the rapidly changing market dynamics.”
The impact of this reduction is expected to affect around 900 employees globally. SolarEdge Technologies, a key player in the renewable energy sector, had previously adjusted its fourth-quarter revenue expectations in November due to weak demand for its solar inverters.
The global solar industry has faced challenges, particularly in Europe, where growth has slowed over the past year due to excess inventories and weakening demand. In the United States, SolarEdge has encountered headwinds, with higher interest rates and a metering reform in California, the country’s largest solar market, leading to a decrease in demand for solar products.
The workforce reduction aligns with SolarEdge’s strategic response to these market dynamics, allowing the company to streamline its operations and adapt to the evolving landscape of the renewable energy sector. The decision underscores the importance of proactive measures to maintain competitiveness and financial resilience in the face of industry challenges.