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SunPower to cut production, idle plants in the Philippines

Almost 900 employees of American solar company SunPower Corporation will be cut following the company’s announcement that it is reorganizing in response to the industry’s troubles.

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The reductions will occur primarily at the company’s operations based in the Philippines.

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"Industry conditions continue to be challenging and while it is never an easy decision to reduce positions, we must make prudent decisions to effectively compete in an industry with significant overcapacity,” said Tom Werner, SunPower chief executive and president.

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“Additionally, we'll further our efforts to reduce costs and improve operational efficiencies," Mr. Werner said.

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A sharp decline in prices worldwide has hit several solar companies hard these past few years. Changes in solar incentive policies – particularly in Europe – has also led to a decrease in solar panel installations, with many projects delaying their completion.

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The company will temporarily idle six of the 12 lines at its Fab 2 cell manufacturing plant in the Philippines and reduce panel manufacturing capacity by 20 percent.

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These restructuring activities will cost SunPower an estimated $10 million to $17 million in severance benefits, lease and related termination costs, and other associated costs in the fourth quarter of 2012.

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According to a Reuters report, the announced job cuts are equivalent to about 17 percent of SunPower’s existing global workforce. As of January, the company had about 5,220 employees worldwide with 4,130 in the Philippines alone.

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SunPower’s third quarter earning conference call will be on November 1, when they will provide additional details on their strategic initiatives. The company aims to reach a cost per watt goal of less than $0.75 on an efficiency adjusted basis for their lowest cost solar panels by the end of 2012. – K.R. Jalbuena

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