Updated: SunEdison To Lay Off 15% Of Its Workforce
Updated 10/05/2015 — In an SEC filing, SunEdison has officially upped the layoff percentage to “approximately 15%”.
SunEdison, one of the world’s largest and most prolific renewable energy developers, is set to soon lay off 10% of its workforce.
Despite its position as one of the world’s leading renewable energy developers, SunEdison, in tandem with its yieldco TerraForm Power, have seen its stock price plummet over the last few months. In July, SunEdison saw its stock reach a 52-week high of $33.45, but that number has plunged to sit currently (at time of writing) at $8.27 (which, over the last few days, is actually an increase on a low of $6.6 on the 29th of September). TerraForm Power, the company’s yieldco, built to own and operate renewable energy assets, has seen a similar drop in investor confidence, dropping from a high of around $40 during July to currently sit at $17.26.
So it comes as no real surprise that the company is having to readjust its strategy, after a nearly-year long spending spree which saw it acquire renewable energy companies Vivint Solar, India-based Continuum Wind Energy and the Central American Globeleq Mesoamerica Energy, which all came on the heels of their massive acquisition of First Wind in January.
These acquisitions were followed by a surprising plunge in SunEdison shares after the company announced its second quarter earnings report — which heralded a record quarter of sales, 1.9 GW under construction, but a net loss of $263 million that seemed to send investors running for their phones.
At the time, Bloomberg Business described analysts as “scratching their heads,” with RBC Capital Markets Mahesh Sanganeria informing clients that “We have been receiving a lot of calls on today’s sell-off of SunEdison. We expected the stock to react positively.”
However, SunEdison’s stock never reacted positively, which many believe has led to the recent news that SunEdison is going to lay off 10% of its 7,300 employees. SunEdison CEO Ahmad Chatila released a company-wide memo on September 30, which was obtained by GTM, which noted that “many employees received notices on Friday.”
“Overall, the proposed changes result in an overall reduction of about 30%, 20% being from non-labor expenses and about 10% from headcount reduction. And this process will take some time to complete. Most of the changes will be announced during the fourth quarter with some final steps expected in the first quarter of 2016,” reads the memo.
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