SolarEdge cutting 400 jobs in second round of layoffs in six months
SolarEdge cutting 400 jobs in second round of layoffs in six months
The struggling renewable energy company laid off 900 workers in January, approximately 16% of its workforce. The latest cutbacks will see SolarEdge part ways with around 8.5% of its remaining team.
The Israeli renewable energy company SolarEdge announced on Monday that it is laying off 400 employees, approximately 8.5% of its workforce. This will be the company's second round of layoffs this year; in January, it laid off 900 workers, approximately 16% of its team at the time, including 550 in Israel. Around 200 employees based in Israel are set to be laid off this time around. Following the latest cutbacks, SolarEdge will remain with around 4,300 employees.
These layoffs are an attempt to overcome a crisis the company has faced over the past year. SolarEdge's stock has fallen by 68% on the Nasdaq since January and has plummeted 88.3% over the last 12 months, while the Nasdaq index rose by 32.2% during the same period. The market value of SolarEdge is now only $1.8 billion, a significant drop from its peak of $20 billion in August 2022, when it became the Israeli company with the highest market cap. Thanks to this high value, SolarEdge was the first and only Israeli company to enter the prestigious S&P 500 index in December 2021. However, due to the stock collapse, it was removed from the index two years later.
SolarEdge, founded in 2006 by five veterans of the Intelligence Corps, produces a variety of products for the home and institutional markets, including optimization systems for solar panels.
The company's crisis stems from two main factors. The first is the increase in interest rates in the U.S., which has hurt the economic viability of installing solar systems. The second is the accumulation of product stock in European warehouses following a wave of orders at the onset of the war in Ukraine.
The company's revenues in the first quarter of 2024 fell by 79% to $204 million, with a loss of $108.6 million compared to a net profit of $174.5 million in the first quarter of 2023. The loss per share was $1.9, sharper than analysts' estimates of $1.57, compared to a profit of $2.9 per share in the corresponding quarter last year. SolarEdge ended the fourth quarter of 2023 with a loss of $162.4 million compared to a profit of $21 million in the corresponding quarter.
Last month, the company issued $300 million in convertible bonds, with the potential to increase to $345 million, carrying an annual interest rate of 2.25% and maturing in 2029. The proceeds are intended to repay part of an existing series of convertible bonds due in 2025, with a low probability of conversion given the stock's fall.
Investors reacted negatively to the offering, causing SolarEdge shares to drop by 20% that day. Last week, SolarEdge reported the retirement of CFO Ronen Faier after 14 years. Faier will continue for the next three months and will be replaced by Ariel Porat.
