SAN FRANCISCO—Solar panel maker SunPower Corp. plans to restructure its Philippines manufacturing operations, temporarily idling six of its 12 manufacturing lines there and cutting about 900 jobs, the company said Tuesday (Oct. 16).
SunPower, a spinout from Cypress Semiconductor Corp., said the moves are intended to significantly reduce inventory, lower operational costs and improve efficiency in light of industry-wide overcapacity.
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"Industry conditions continue to be challenging and while it is never an easy decision to reduce positions, we must make prudent decisions to effectively compete in an industry with significant overcapacity," said Tom Werner, SunPower president and CEO, in a statement. Werner said SunPower would also further its efforts to reduce costs and improve operational efficiencies.
The moves will idle and 20 percent of SunPower's panel manufacturing in the Philippines, SunPower said. As a result, SunPower's overall blended utilization for the fourth quarter will be about 60 percent, the company said.
SunPower said it expects to record restructuring charges totaling $10 million to $17 million, composed of severance benefits, lease and related termination costs and other associated costs. Most of the charges will likely be recorded in the fourth quarter, SunPower said, and more than 90 percent of the charges are expected to be cash.
SunPower said it continues to make strong progress on its cost reduction roadmap and remains committed to reaching its cost per watt goal of less than 75 cents per watt on an efficiency adjusted basis for its lowest cost solar panels by the end of 2012. The company is set to report third quarter financial numbers and provide additional details on its strategic initiatives on Nov. 1.
"effectively compete in an industry with significant overcapacity" This is certainly a symptom of not following market conditions. It's rare that a technology that isn't quite ready can be forced out into the world. At some point, the economics will make sense, but not yet.