(Photo: SolarEdge website)
Israeli solar inverter manufacturer SolarEdge Technologies announced on Sunday (Jan. 21) a strategic organizational adjustment aimed at reducing their operational costs.
The company plans to implement global workforce reduction of 900 employees, equivalent to 16% of its total workforce. The headquarters in Herzliya will be significantly affected, along with the industrial zone office in Nof Hagalil in the Northern part of the country, leading to the layoff of 550 employees. SolarEdge has a global presence, including an office in Taiwan.
SolarEdge stated that this wave of layoffs is primarily due to declining financial performance and a sluggish solar energy market. Prior to this, the company had already halted its light commercial electric vehicle business and temporarily suspended manufacturing operations in Mexico, while also reducing its production capacity in China.
Reuters reported that the growth of the solar energy market in the Europe has slowed down due to excess inventory and weakened demand. In the United States, the entry into an interest rate hike cycle and changes to metering methods in California, the largest market in the country, have also contributed to a sharp decline in demand.
The SolarEdge CEO, Zvi Lando stated, “We have made a very difficult, but necessary decision to implement a workforce reduction and other cost-cutting measures in order to align our cost structure with the rapidly changing market dynamics.”
Founded in 2006, SolarEdge was once the most valuable Israeli company on the U.S. stock market with a market capitalization reaching nearly US $20 billion. At its peak, it was rumored that two out of every three inverters in the market were SolarEdge’s. However, its market share has continuously been eroded by competitors, leading to an 80% plummet in market value over the past year. Additionally, the company has also been removed from the S&P 500 index since last December.
The solar energy industry continues to face significant environmental challenges. In December 2023, Enphase Energy, a major player in the U.S. solar microinverter sector, also announced an organizational restricting plan. This initiative involves a global workforce reduction of 10%, affecting approximately 350 employees and contractors. The goal is to focus on clearing excess inventory and aligning production capacity with the current market demand.