SolarEdge set to cut hundreds of jobs in second round of layoffs in six months
SolarEdge set to cut hundreds of jobs in second round of layoffs in six months
After seeing its market cap fall by 89% over the past year, the renewable energy company is embarking on another round of cutbacks
Israeli renewable energy company SolarEdge is expected to announce the layoffs of hundreds of employees in the coming week. This will be the company's second wave of layoffs this year, following the termination of 900 employees, approximately 16% of the workforce, in January.
Since the beginning of the year, SolarEdge's shares have fallen by 68% on the Nasdaq stock exchange, and over the last 12 months, they have plunged by 89.1%.
The company announced in January that it was embarking on an extensive cutback program, including the dismissal of 900 employees, 550 of whom in Israel. SolarEdge employed about 5,500 people, so that represented a 16% reduction in its workforce.
One of the main reasons for SolarEdge's decline is the increase in interest rates worldwide, especially in the U.S.. The solar market, particularly the domestic market in the U.S., relies on loans that will be repaid through the sale of solar electricity. The interest rate increases in the U.S., from almost zero in mid-2022 to over 5% today, have significantly affected the economic viability of solar installations. In December, when the Federal Reserve signaled possible interest rate cuts during 2024, the company's stock, managed by Zvi Lando, surged 35% in one day.
Another reason for the company's decline is the accumulation of inventory in Europe. After the start of the war between Russia and Ukraine in 2022, fuel prices on the continent soared, along with prices of fossil energy produced from them. This made electricity production from renewable energies more viable, leading to a surplus of inventory. The accumulation of inventory in Europe subsequently resulted in a decrease in orders for the company's products.
This week, SolarEdge announced the retirement of CFO Ronen Faier after 14 years in the position. Faier, who will continue for the next three months, will be replaced by Ariel Porat, formerly the European head at Siemens.
SolarEdge declined to comment on the matter.
