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Solar firm SunPower to cut jobs, wind down most of residential direct sales

Published 04/24/2024, 09:35 AM
Updated 04/24/2024, 03:08 PM
© Reuters. FILE PHOTO: Solar panels from SunPower are installed on residential buildings at a model home display in the Eureka Grove neighborhood of Granite Bay, California, U.S., October 5, 2021. REUTERS/Nathan Frandino/ File photo
SPWR
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(Reuters) -SunPower plans to reduce its workforce by about 1,000 people in the coming days and weeks and move away from most of its direct sales channel as part of a restructuring plan to lower costs, the solar firm said on Wednesday.

The development comes a day after the company disclosed it identified misstatements in its results for fiscal 2022.

SunPower (NASDAQ:SPWR) said it will wind down its SunPower Residential Installation locations and close SunPower Direct sales, adding that installations would be handled by its Blue Raven (NASDAQ:RAVN) Solar and independent dealers. SunPower had acquired Blue Raven for $165 million in 2021.

The company had 586,250 residential customers as of Dec. 31, 2023.

JP Morgan analysts said in a note that the realignment would largely eliminate SunPower's direct sales channel and move the company towards third-party sales.

Companies providing solar power and storage solutions have seen rising inventory levels and metering reforms in California weigh on demand. The metering reform lowered the tariff residential customers receive from the grid, dampening demand for solar setups.

SunPower, which had 3,800 full-time employees globally prior to the job cut announcement, expects charges of about $28 million related to severance benefits, early contract terminations and certain write-offs.

The steps are being taken to simplify the business structure, transitioning away from areas where the company has been unable to sustain profitable operations, and improving financial controls, SunPower's Principal Executive Officer Tom Werner said in a letter to employees.

Werner, who served as CEO for nearly two decades, was brought back from retirement earlier this year as executive chairman while CEO Peter Faricy left.

© Reuters. FILE PHOTO: Solar panels from SunPower are installed on residential buildings at a model home display in the Eureka Grove neighborhood of Granite Bay, California, U.S., October 5, 2021. REUTERS/Nathan Frandino/ File photo

Its restructuring plans are likely to be completed by the second quarter.

Shares were down 1.2% in afternoon trade.

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