Enphase to Cut 17% of Global Workforce Amid Solar Decline

Enphase Energy will cut 17% of its global workforce, about 500 employees, due to declining residential solar demand. The company will close its Guadalajara site and focus manufacturing in fewer locations. Enphase expects US$17-20 million in restructuring charges, with higher operating expenses in 4Q24. The restructuring is expected to be completed by 1Q25, with cost savings targeted by 2025.

The company announced the layoffs on Friday, noting that the cuts were necessary due to a downturn in the residential solar market, particularly in Europe. The company, a key player in solar inverter manufacturing, is focusing its contract manufacturing in four existing locations: two in the United States, one in India, and one in China. Enphase will cease its contract manufacturing operations in Guadalajara, Mexico, as part of this restructuring initiative.

"The ongoing challenges from a tough 2023 solar market have continued to impact us and our industry partners throughout 2024," said Badri Kothandaraman, CEO, Enphase Energy in a message to Enphase employees, as reported by Yahoo Finance. 

Enphase’s shares have dropped nearly 50% this year, driven by challenges such as lower electricity prices and increasing competition in key markets like the Netherlands and Germany. The company now expects to incur between US$17 million and US$20 million in restructuring and asset impairment charges, with approximately US$14 million of these charges occurring in the 4Q24.

Cash expenditures related to the restructuring are estimated to be between US$11 million and US$12 million, reports Reuters. This restructuring follows Enphase’s previous round of layoffs in December 2023, which resulted in a 10% reduction of its workforce, including 350 employees and contractors.