LDK Solar has cut more than 5,000 jobs this year
5/1/2012 12:19 AM EDT
SAN FRANCISCO—More evidence of the trouble facing the solar industry as subsidies dry up and intense competition continues: An executive for LDK Solar Co. Ltd. said Monday (April 30) that the photovoltaic panel manufacturer has cut more than 5,000 jobs so far this year.
In a conference call with analysts following a quarterly report in which LDK disclosed that chalked up a net loss of nearly $590 million in the fourth quarter of 2011, Jack Lai, the company's chief financial officer, said the company's most recent headcount shows LDK with 19,495 employees, 5,254 less than it had at the end of 2011.
LDK's headcount is down about 9,078 less from a high of 28,273 in July 2011, Lai said.
Lai said LDK implemented strategies to optimize its organization structure, increase productivity and align production plan with labor requirements, increasing productivity and operational efficiency. "We are essentially right sizing our production output in order to build a sustainable capacity with redundant scale to match our customers demand," Lai said.
Hamstrung by competition and decreasing demand, solar panel firms have in recent months shed thousands of jobs. Most recently, First Solar Inc. said earlier this month it would slash about 2,000 jobs and close manufacturing lines as part of a restructuring plan to reduce costs.
LDK (Xinyu City, China) reported net sales of $420.2 million for the fourth quarter of 2011, down 11 percent from the third quarter and down 54 percent from the year-ago quarter. The company reported a net loss for the quarter of $588.7 million, compared to a net loss of $114.5 million in the previous quarter and a net income of $145.2 million in the year-ago quarter.
LDK's sales for the fourth quarter came in below consensus analysts' expectations, which called for revenue of about $431 million, according to Yahoo Finance.
LDK, which postponed releasing its fourth quarter results, predicted that sales would fall even more in the first quarter of 2012, which closed last month. The company said its revenue for the first quarter was between $190 million and $230 million, well below consensus analysts' expectations of around $397 million, according to Yahoo Finance. For fiscal 2012, the company estimates that its sales would be between $2 billion and $2.7 billion.
"The solar industry experienced a tremendous supply and demand imbalance throughout the value chain during the fourth quarter," said Xiaofeng Peng, LDK's chairman and CEO, in a statement. "Our results reflected the negative effects of this dislocation in the PV market. Weak market demand and rapidly declining average selling prices reduced our revenue and adversely impacted our margins in the quarter."
Peng said LDK expected excess capacity and further policy uncertainty in Europe and the U.S. to drag on solar sales in 2012. He said LDK remains focused on driving down its cost structure and production costs.