SolarEdge to announce new wave of layoffs this month
SolarEdge to announce new wave of layoffs this month
Fourth round of job cuts since last January signals ongoing struggles in key markets.
SolarEdge is preparing for another wave of layoffs expected to take place in the coming month, Calcalist has learned. The scope of the layoffs remains unknown. If the move materializes, it will mark the fourth wave of layoffs since January of last year and the first under CEO Shuki Nir.
The renewable energy company is grappling with significant challenges in its two main markets. In the United States, high interest rates have reduced the economic viability of installing solar panels on residential rooftops, leading to a decline in demand for the company's products. In Europe, SolarEdge faces a crisis of excess inventory. This oversupply stems from the initial response to the war in Ukraine, during which restrictions on importing natural gas from Russia prompted countries to stockpile alternative energy products, including SolarEdge’s offerings. While energy and gas prices have since stabilized, the surplus inventory continues to weigh on the company’s performance.
Looking ahead, two critical factors—interest rates and electricity prices—will likely determine SolarEdge’s prospects. A drop in interest rates or a rise in electricity prices could improve the economic viability of home solar installations, driving renewed demand for the company’s products.
Despite its challenges, there are signs of optimism. About two weeks ago, Goldman Sachs predicted a business turnaround for SolarEdge, projecting improved results. An analyst at Goldman Sachs dismissed fears that the company would struggle to repay $350 million in bonds due in September 2025 as exaggerated. The analyst also noted that recent cost-cutting measures could bolster the company’s financial health. Following this report, SolarEdge's stock surged by 17%.
The company's operational struggles have resulted not only in multiple rounds of layoffs but also in significant leadership changes. CFO Ronen Faier stepped down, followed by then-CEO Zvi Lando, who resigned in August but retained a seat on the board. Ronen Faier briefly served as interim CEO before Shuki Nir took over in December. Additionally, Nadav Zafrir, who had served as the company’s chairman for five years, stepped down but remained a director. Avery More assumed the role of chairman. Zafrir later resigned as a director to become CEO of the Israeli software company Check Point.
In 2024, SolarEdge conducted three waves of layoffs, reducing its workforce to 3,700 employees. The first wave, in January 2024, followed a sharp decline in the company’s stock and a drop in sales. It saw the termination of 900 employees, about 16% of the workforce. The second wave came in July, with 400 additional employees let go.
The third wave occurred in November, when SolarEdge shuttered its energy storage division, resulting in the termination of 500 employees in South Korea. This round of layoffs also included the closure of the "Sela 2" facility in the country. SolarEdge expects annual savings of $7.5 million from the closure, starting mid-2025. The division had relied on the operations of Kokam, a South Korean company acquired by SolarEdge in 2018 for $110 million. While SolarEdge will continue selling home storage products, it has ceased producing large battery cells for power grid applications, previously a focus of the now-defunct division.
