Photo: First Solar
First Solar announced this morning that it would cut its workforce by some 30 per cent, eliminating 2,000 positions across the company’s global operations.The solar giant plans to close all of its operations in Frankfurt, Germany and indefinitely idle some production lines in Malaysia, adding to reductions already taking place in Europe and the U.S.
First Solar hopes the layoffs will save it $30 to $60 million this year, and as much as $120 million a year in the future.
“After a thorough analysis, it is clear the European market has deteriorated to the extent that our operations there are no longer economically sustainable, and maintaining those operations is not in the best long-term interest of our stakeholders,” Interim Chief Executive at First Solar Mike Ahearn said. “The solar market has fundamentally changed, and we are quickly adapting our market approach and operations to maintain and build upon our competitive advantage.”
The news follows a series of blows to the solar industry and First Solar in particular. In February, Germany’s environment minister Norbert Roettgen said the country would cut subsidies supporting the solar industry by as much as 30 per cent.
The cuts, which had been expected, were far larger than the 15 per cent decrease analysts were anticipating.
“With the new proposal, the royalty rates are halved compared to 2009. In view of the past two years of greatly increased volume, is the re-adjustment of funding,” Roettgen said at the time. “The goal is that in a few years, the photovoltaic market will be ready and make do without subsidies.”
At its peak, Germany accounted for 46.8 per cent of First Solar’s core market installation capacity. First Solar has been rapidly trying to execute on plans to transition from these subsidized markets to a manufacturer for electric utilities.
Investors have been substantively sceptical of the solar industry since Solyndra collapsed amid a fraud investigation by the FBI, a blow to the Obama administration in its hunt for green job growth.
Shares in First Solar are down 1.5 per cent in pre-market trading.