SunPower Corp said it will idle some solar cell production lines in the Philippines and cut about 900 jobs, or 17 per cent of its global workforce, as overcapacity continues to cast a shadow on solar equipment makers.
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 per cent 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 per cent of its panel manufacturing in the Philippines.
The company, which is 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 occur.
The company had about 5,220 employees worldwide as of January 1, with 4,130 employees located in the Philippines.
A number of solar companies have begun to cut production, but analysts say more cuts are needed to balance supply and demand.
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.
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 be cash.
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.
Sunpower shares, which have fallen 47 per cent in the last 12 months, closed at $4.71 on Monday on the Nasdaq.
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