SunPower to cut 25 percent jobs, close plant in cost-cutting effort
(Reuters) - SunPower Corp <SPWR.O>, the No. 2 U.S. solar panel maker, said on Wednesday it would lay off about 25 percent of its workforce, or 2,500 employees, and close one plant as part of a cost-cutting plan announced last month to counter slumping prices.
Solar companies have been hard hit after stiff competition pushed prices of solar panels lower and as customers held off purchases in the hope of a further decline in prices, especially as Chinese companies boosted production levels.
Prices would stabilize in 2017 and there would be some improvement in the industry in the latter half of the year, SunPower Chief Executive Tom Werner said on Wednesday.
However, he said there was no "significant" reduction in capacity from China.
Shares of the company, which is expected to post its sixth consecutive loss in the current quarter, were up 2.7 percent at $7.15 in early trading on Wednesday.
SunPower, majority owned by French energy giant Total SA <TOTF.PA>, in November outlined a cost-cutting plan that included lowering operating expenses in 2017 to about $350 million, compared with $450.9 million in 2015, and more than halving its 2017 capital budget to about $100 million.
SunPower on Wednesday said the plan also includes closing a 700-megawatt (MW) solar cell fabrication facility in the Philippines, which would account for most of the job cuts.
The company forecast 2017 revenue, excluding certain items, of $2.10-$2.60 billion, well below analysts average estimate of $2.70 billion, according to Thomson Reuters I/B/E/S.
SunPower said it expects to incur restructuring and other charges totaling about $200 million in the current quarter and restructuring charges of $225-$275 million through the end of 2017.
The company reiterated that it expects to generate positive cash flow from operations through the end of 2017 and exit the year with about $300 million in cash.
The company had said in August that it would slash about 15 percent jobs and also cut its 2016 revenue forecast for the third time. It had about 8,218 employees as of the third quarter, down from 8,309 in January.
The San Jose, California-based company's stock had fallen more than 76 percent this year up to Tuesday's close.
(Reporting by Arathy S Nair in Bengaluru; Editing by Savio D'Souza)
