Israeli solar energy company SolarEdge Technologies (Nasdaq: SEDG) has announced that it is shedding 400 employees worldwide - its third round of layoffs in less than a year. The company said that the aim of the move is to cut costs and improve efficiency and that it would also lead to $3-5 million in one-time costs in the first quarter of 2025 for various compensation and benefit payments. After completing the layoffs, SolarEdge expects savings of $9-11 million in expenditure each quarter.
SolarEdge carried out its first round of layoffs in January 2023, dismissing 900 employees, including 550 in Israel. A second round was carried out in July 2024, in which 400 employees were laid off, half of them in Israel. In November 2024, it announced the closure of its energy storage operation, a move that included laying off another 500 employees in South Korea. Before all these moves, SolarEdge employed 5,633 employees at the end of 2023, including 3,160 in Israel.
While the previous rounds of layoffs were carried out by the then CEO Zvi Lando, the current round is being led by new CEO Shuki Nir. In a letter to employees, Nir wrote, "We strongly believe in the great opportunities that SolarEdge has in the long term. However, we must face the challenges of 2025: achieving the financial stability required to perform a turnaround and meet the organizational goals that will support growth."
He said at this stage the company must cut operating expenditure, even after the previous cutbacks and the reduction in the workforce over the past year. He noted that the layoffs will be in all departments. "We understand how difficult and painful this period is for the SolarEdge team, and I have no doubt that you will show compassion for each other and support colleagues who will be affected. Our goal is to support employees as much as possible."
Problems come in clusters
In addition to the layoffs, Nir added that the company is considering additional organizational steps to cut more costs, and will announce them later.
"I can imagine that many of you are asking yourselves how we got to this point, and more importantly, how we can ensure that this does not happen again after everything we have been through in the past year," Nir wrote. "I want to make it clear that these steps are absolutely necessary, in order for the company to emerge stronger and more resilient." According to him, the company has already made significant progress in achieving financial stability. In this context, he mentions agreements that will allow SolarEdge to benefit from the fact that it manufactures in the US as well as from the sale of tax benefits.
The company is suffering from significant challenges in the market in which it operates, which have led to a decline in its results. The weakness comes against the backdrop of large inventory accumulation among distributors of the company's products, which has led to a decline in new orders.
In another effort to cut costs, SolarEdge is seeking sub-tenants for the campus that Azrieli is building for it in Glilot.
Published by Globes, Israel business news - en.globes.co.il - on January 6, 2025.
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