In a sudden twist of fate for the green tech industry, Bay Area's Enphase Energy is cutting 350 jobs amid a steep downturn in demand. The Fremont-based company, known for its solar panel conversion equipment, is slashing its workforce by a significant 10%, according to a memo from CEO Badri Kothandaraman obtained by the San Francisco Chronicle. Looking to become leaner and tackle the challenging economic landscape, Enphase is also planning to reduce its worldwide real estate footprint and consolidate facilities.
As the company navigates through a tight spot, having seen its stock plummet by over half since the year's start, the directive, which further includes the closure of plants in Wisconsin and Romania, was detailed in a company-wide message. Kothandaraman pinned the blame for their financial woes on metering reforms in California and said interest rate hikes were the result, revealing that the combined punch has been knocking the wind out of consumer demand.
Right-sizing operations will knock Enphase's global capacity down from 10 million units to around 7.25 million per quarter, Kothandaraman shared in a memo also covered by Public Now. The CEO has taken full responsibility for the downsizing, stressing that the departing employees, who have contributed substantially, would be treated with respect and assistance in their transitions.
In efforts to further cinch the company's belt, Enphase has prolonged a hiring and travel freeze through 2024 and plans tighter control on spending across all departments. The expected sting from the restructuring amounts to about $16 to $18 million in charges, predominantly impacting this year's final quarter. As Enphase trims down, Kothandaraman remains upbeat in the memo about its core strategy and the potential for a market uptick if the U.S. Federal Reserve opts for interest rate cuts in the next year.
While many employees brace for a January goodbye, severance packages and continued healthcare benefits have been pledged, following local laws and practices for international locations. In the end, Kothandaraman's communiqué points towards the survival and stronger emergence of Enphase from this fiscal squall, leaning on innovation and the anticipation of renewed demand as the guiding beacon in 2024.
