Enphase Energy Plans Workforce Reduction

Enphase Energy Inc. has announced its intention to implement a workforce reduction, affecting approximately 10% of its employees and contractors in Wisconsin, as part of its effort to align its operations with the current economic climate.

Badri Kothandaraman, CEO of Enphase, acknowledged the challenging macroeconomic environment that the company is facing and expressed the need for difficult changes to be made. In a letter to employees attached to a filing, Kothandaraman emphasized the company’s commitment to reducing operating costs and improving efficiency.

The restructuring will lead to the discontinuation of manufacturing operations at two Enphase locations: Timisoara, Romania, and Wisconsin. Additionally, the company plans to extend its freeze on hiring and travel throughout the following year and reduce discretionary spending in various areas.

Enphase anticipates restructuring and asset-impairment charges of around $16 million to $18 million, with $7 million expected to be incurred as cash expenditures. The majority of these charges, amounting to approximately $15 million, are projected to be incurred in the fourth quarter of 2023. However, the company reassured that these charges will not have a significant impact on its overall financial condition or results.

Following the announcement, Enphase’s stock experienced a marginal decline during after-hours trading, despite ending the regular trading day with a slight increase of 0.1%. Notably, the stock has seen a decrease of 53% in value this year, in contrast to the approximately 23% gains made by the S&P 500 index.

This news comes shortly after SunPower Corp. issued a going-concern warning due to impending debt obligations. The alternative-energy sector has been facing challenges this year, primarily due to reduced demand and increasing interest rates.