SolarEdge seen laying off hundreds

SolarEdge CEO Zvi Lando credit: Eyal Izhar
SolarEdge CEO Zvi Lando credit: Eyal Izhar

In January this year, the solar energy technology company shed 900 employees, but another round of layoffs is apparently imminent.

Six months after laying off 16% of its workforce, solar energy technology company SolarEdge Technologies (Nasdaq: SEDG) appears to be about to embark on another substantial round of layoffs that could amount to hundreds of employees. At the end of 2023, SolarEdge employed 5,633 people, 3,160 of them in Israel. In January this year, it laid off 900 employees, 500 of them in Israel. The move was explained as an attempt to adapt the company’s cost structure to changed market conditions, and to return to profitable growth. The company estimated that the layoffs would save $75-80 million quarterly. The difficult period in SolarEdge’s business has, however, continued in the months since it carried out the layoffs.

At its peak, SolarEdge, headed by Zvi Lando, had a market cap of $20 billion. Its current market cap is $1.8 billion, after a slight recovery in its share price this month. The company produces systems for maximizing power output from solar energy, and related products.

In past years, it benefitted from high demand for its products thanks to low interest rates that made it easy to finance solar energy projects, along with rising electricity tariffs around the world. Market conditions then changed considerably, and distributors who bought products from the company in the boom times were left with stocks, which meant that they cut purchases, leading to a decline in SloarEdge’s revenue and a switch to losses. The company’s revenue guidance for the second quarter is $250-280 million, which represents an improvement over the first quarter but a decline in comparison with the corresponding quarter of last year. The company is expected to report a gross profit margin of minus 4% to 0%.

SolarEdge recently raised $300 million convertible debt. The convertible senior notes bear annual interest of 2.25%, and are due for redemption in 2029, with a conversion price of $34.32 per share (which compares with a current price of $31.65). The proceeds of the offering will be used to buy back part of the company’s previous convertible notes series, due for repayment in 2025 and bearing 0% interest. Before the current offering, SolarEdge had $950 million cash, versus long-term debt of $628 million.

Published by Globes, Israel business news - en.globes.co.il - on July 14, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

SolarEdge CEO Zvi Lando credit: Eyal Izhar
SolarEdge CEO Zvi Lando credit: Eyal Izhar
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