First Solar to slash 2,000 jobsSAN JOSE, Calif.—Photovoltaic solar system provider First Solar Inc. said Tuesday (April 17) it would slash about 2,000 jobs and close manufacturing lines as part of a restructuring plan to reduce costs.
First Solar (Tempe, Ariz.) said it would close an older manufacturing plant in Frankfurt, Germany, and idle indefinitely four production lines at its manufacturing center in Kulim, Malaysia, effective May 1. In addition to the manufacturing closures, other personnel reductions in the U.S. and Europe will contribute to the 2,000 job cuts, which represents about 30 percent of the company's global workforce, First Solar said.
First Solar said the restructuring plan was undertaken in response to deteriorating market conditions in Europe and the need to reduce costs and align its organization with sustainable market opportunities.
"The solar market has fundamentally changed, and we are quickly adapting our market approach and operations to maintain and build upon our competitive advantage," said Mike Ahearn, First Solar's chairman and interim CEO, in a statement.
Ahearn said that, following a period of growth, First Solar was scaled to operate at higher volumes than was currently available. "As a result, it is essential that we reduce production and decrease expenses to reflect the smaller volume of high-probability demand we forecast," Ahearn said. "These actions will enable us to focus our resources on developing the markets where we expect to generate significant growth in coming years."
In a statement issued by the Solar Energy Industries Association trade group, Rhone Resch, the group's president and CEO, said First Solar's restructuring announcement demonstrates the impact of inconsistent policy. "Policy certainty is critical for all energy markets, and the solar industry is no different," Resch said. "With drastic policy changes in the leading European markets, First Solar has chosen to focus its activities in areas that provide a higher level of policy stability and product demand, including the U.S., First Solar's largest market."
The restructuring initiatives are expected to reduce the company's costs by $30 million to $60 million this year and $100 million to $120 million per year going forward, First Solar said. The company plans to take restructuring charges of $245 million to $370 million, of which $80 million to $120 million would be cash expenditures covering employee severance, asset impairment and repayment of a government grant associated with the Frankfurt facility, among others, First Solar said.