(Corrects paragraphs one and rewrites paragraph six to say the
company cut 15 percent of its global workforce, not 17 percent)
* Most of the job cuts in Philippines
* To incur restructuring charge of $10 mln-$17 mln
Oct 16 SunPower Corp said it will idle
some solar cell production lines in the Philippines and cut
about 900 jobs, or 15 p e rcent of its global workforce, as
overcapacity continues to cast a shadow on solar equipment
The solar panel industry has been hit by excess capacity and
waning demand with top consumer Europe cutting back subsidies
for green power. Prices have tumbled about 30 percent this year,
virtually erasing profits across the industry.
SunPower said on Tuesday that it will temporarily idle half
of the 12 lines at its 330 megawatt Fab 2 cell manufacturing
plant and 20 percent of its panel manufacturing in the
The company, majority-owned by French oil company Total SA
, closed a plant in the Philippines earlier this year
and streamlined its manufacturing processes at its other two
plants in the country.
Sunpower said most of the 900 job cuts would be in the
Philippines. It did not specify where the other job cuts would
The company said in a regulatory filing on Tuesday that the
cuts represent about 15 percent of its global workforce, but did
not update its latest employee count. As of Jan. 1, the company
had about 5,220 employees worldwide, of which 4,130 were located
in the Philippines.
Solar companies are looking to cut costs in view of
dwindling margins. American and European companies also face
stiff competition from Chinese rivals, who are being
investigated for exporting below-cost products.
Sunpower said it was looking at producing its lowest-cost
solar panels for less than 75 cents per watt, on an efficiency
adjusted basis, by the end of 2012.
"Top-tier Chinese companies are on the cusp of making
modules for 60 cents per watt and less," Raymond James analyst
Pavel Molchanov wrote in an e-mail to Reuters.
"Of course SunPower has higher conversion efficiency and
therefore charges a premium, but there is a limit to how high
that premium can be," he said.
A number of solar companies have begun to cut production,
but analysts say more cuts are needed to balance supply and
Suntech Power Holdings Co Ltd, the No.1 solar panel
maker, slashed production capacity last month, while First Solar
Inc cut output of its thin-film solar panels earlier
this year. A number of other players have been operating their
plants at reduced rates.
"Industry wide production capacity exceeds global demand by
roughly two times, so much more rationalization is needed," said
He said production cuts were needed particularly in China,
which accounts for over half of the world's panel production.
California-based Sunpower expects to record a restructuring
charge of $10 million to $17 million, most of which will be in
the fourth quarter. More than 90 percent of these charges will
Sunpower shares, which have fallen 47 percent in the last 12
months, were nearly flat at $4.69 on Tuesday on the Nasdaq.
(Reporting by Swetha Gopinath and Neha Alawadhi in Bangalore;
Editing by David Cowell and Don Sebastian)