Published on February 26th, 2018 | by Joshua S Hill0
SunPower To Cut Estimated 200 Jobs & Incur $20+ Million Restructuring Costs In Wake Of Solar Tariffs
February 26th, 2018 by Joshua S Hill
American solar manufacturer SunPower has announced restructuring plans in the wake of Donald Trump’s imposition of a 30% tariff on solar modules and cells following a Section 201 trade case that will see the company cut up to 250 jobs and incur restructuring costs of between $20 million and $30 million.
In an SEC filing (PDF) submitted on February 22, SunPower announced that it was entering into a period of restructuring intended to reduce operating expenses and overhead while focusing on improving profitability in the wake of the newly-announced US solar tariff.
SunPower highlighted two specific results of the restructuring expected in the near-term, including cutting between 150 and 250 non-manufacturing employees, which represents approximately 3% of the company’s global workforce. Unsurprisingly, no specifics were given as to which countries’ jobs will be cut, but SunPower expects some of the severances to come under a voluntary departure program.
The company also expects to incur restructuring costs worth between $20 million to $30 million, made up primarily of severance benefits (which will come in at around $11 million to $16 million) and terminating real estate leases and other associated costs (expected to cost between $9 million and $14 million).
SunPower expects a “substantial portion” of its restructuring costs will be incurred in the first and second quarters of 2018, which likely means we will see those job cuts pretty soon.
The news comes only a week after the company announced its Fourth Quarter and Full Year 2017 financial results which reported a 35% decrease in revenue year-over-year, and guidance for the First Quarter and Full Year 2018 well below expectations due to the Section 201 trade case and resulting solar tariff.
“Unfortunately, we are already seeing a negative near-term impact from the ruling as the increased costs due to import tariffs have delayed certain 2018 projects and made other projects uneconomical,” explained Tom Werner, SunPower president and CEO. “We have also put our planned $20 million US employment expansion on hold and are considering other significant cost-saving initiatives to lower our overall expense structure and improve our financial performance.”