Enphase Energy (NASDAQ:ENPH) said Monday it would reduce its workforce by about 10%, affecting about 350 contractors and employees, and halt contract manufacturing operations at two of its locations.
Additionally, the company will resize other contract manufacturing sites and will continue with its hiring and travel freeze until 2024.
The two places where operations will stop are Timisoara, Romania and the US state of Wisconsin. Equipment located there will be redeployed for use at ENPH's two existing contract manufacturing partners in the US states of South Carolina and Texas.
Once those two U.S. plants have fully ramped up production, Enphase (ENPH) expects to have global capacity of about 7.25 million microinverter units per quarter, down from about 10 million units per quarter. previous.
“The Company estimates that it will incur approximately $16 million to $18 million in asset restructuring and impairment charges, of which approximately $7 million will be cash expenses. Approximately $15 million of the charges in the fourth quarter of 2023.” Enphase (ENPH) said in a regulatory filing.
“Over the past 12 months, the solar market has experienced a lot of turbulence around the world. In the United States, high interest rates have caused a significant drop in consumer demand, while California's NEM 3.0 transition continues creating more uncertainty. We saw tremendous growth in Europe until mid-2023, when demand slowed and interest rates led to high inventory levels,” ENPH chief executive Badri Kothandaraman said in a message to employees. .
The Enphase (ENPH) layoffs come after the solar equipment maker provided disappointing guidance for the current quarter in October, prompting several analyst downgrades of the stock. The company said Monday that its outlook for the fourth quarter remained unchanged except for a $15 million increase in its GAAP operating expense forecast in connection with the actions announced today.
“Our focus in the first half of 2024 will be to remove excess inventory in the pipeline around the world. However, we see increased confidence that the US Federal Reserve will reduce the interest rate next year , and we expect this to lead to growth in the second half of the year,” said Kothandaraman, CEO of Enphase (ENPH).
ENPH shares closed earlier +0.1% at $124.03.