First Solar lays off 2,000 as Europe demand wanes
NEW YORK, USA – FIRST Solar Inc is laying off 2,000 workers and closing its plant in Frankfurt, Germany, in response to waning demand for solar panels and increased competition from China.
America’s largest maker of solar panels said the layoffs amount to 30 per cent of its global workforce. Some cuts come from shutting down the Frankfurt (Oder) plant, where it doubled the number of employees to more than 1,200 just last year. The company will also shutter some production in Malaysia. Additional jobs will be cut in both Europe and the US.
Solar manufacturers have been hurt by the global recession, an influx of Chinese panels and declining subsidy programmes in Europe. Germany, the world’s largest market for solar power, announced in February that it would cut solar subsidies by 30 per cent.
“It is clear the European market has deteriorated to the extent that our operations there are no longer economically sustainable, and maintaining those operations is not in the best long-term interest of our stakeholders,” said First Solar Chairman and CEO Mike Ahearn in a statement.
First Solar, which specialises in “thin film” solar modules that are both cheaper and less efficient than those made by competitors, lost US$39.5 million in 2011. Its shares have dropped nearly 85 per cent in the past 12 months. The shares rose about five per cent in premarket trading.
First Solar must adapt to a solar market that has “fundamentally changed”, Ahearn said.
“It is essential that we reduce production and decrease expenses,” the CEO said. “These actions will enable us to focus our resources on developing the markets where we expect to generate significant growth in coming years.”
After making the cuts, First Solar said it expects manufacturing costs to drop by US$30-US$60 million this year and another US$100-US$120 million a year afterward. It will book a restructuring charge of US$245 to US$370 million, mostly in its first-quarter results.