SunPower Reveals Major Workforce Reduction and Restructuring Plan

By Editor


SunPower, a leading solar firm, has revealed plans to streamline its operations, including a reduction of approximately 1,000 employees, as part of a restructuring initiative aimed at cutting costs.

The news announcement, made on Wednesday, follows the company’s disclosure of misstatements in its fiscal 2022 results, signaling ongoing financial challenges.

SunPower, as part of the restructuring, aims to shift away from most of its direct sales channels, winding down its SunPower Residential Installation locations and discontinuing SunPower Direct sales. Installations will now be handled by Blue Raven Solar, a company acquired by SunPower for $165 million in 2021, as well as independent dealers. SunPower currently serves 586,250 residential customers as of December 31, 2023.

Analysts noted that these changes would reduce SunPower’s reliance on direct sales channels, marking a shift towards third-party sales. The move comes amidst industry-wide challenges, including rising inventory levels and metering reforms in California, which have impacted demand for solar power and storage solutions. Metering reforms have led to reduced tariffs for residential customers, dampening demand for solar installations.

Prior to the workforce reduction, SunPower employed approximately 3,800 full-time employees globally, Reuters news report said. The company anticipates charges of around $28 million related to severance benefits, early contract terminations, and certain write-offs associated with the restructuring.

In a letter to employees, SunPower’s Principal Executive Officer Tom Werner emphasized that these measures are aimed at simplifying the company’s business structure, focusing on areas with sustainable profitability, and enhancing financial controls. Tom Werner, who returned from retirement earlier this year as executive chairman, assumed leadership responsibilities following the departure of CEO Peter Faricy.

SunPower anticipates completing its restructuring plans by the second quarter, signaling its commitment to navigating the challenges and positioning itself for long-term success in the solar industry.

SunPower, which is facing financial crisis, has recently secured over $300 million in project financing commitments from funds managed by Apollo, ATLAS SP Partners, and Hannon Armstrong Sustainable Infrastructure Capital for its residential solar and storage lease programs, which will be paid upon installation.

Since 2010, SunPower has provided solar lease financing options to customers through its network of residential solar dealers across the U.S., new home builders where the company holds a market-leading position and direct sales teams. SunPower lease contracts made up 73 percent of SunPower Financial originated volume in the fourth quarter of 2023 compared to 26 percent in the fourth quarter of 2022.

Baburajan Kizhakedath

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