Allows Company to Effectively Compete During Industry Transition and Oversupply Environment
SunPower Corp. (NASDAQ: SPWR) today announced a reorganization plan to restructure its Philippines manufacturing operations and reduce its workforce.
As part of this initiative, the company will temporarily idle six of the 12 lines in its Fab 2 cell manufacturing plant and 20 percent of panel manufacturing in the Philippines to significantly reduce inventory, lower operational costs and improve efficiency. As a result, the overall blended utilization for the fourth quarter will be approximately 60 percent. Additionally, the company will reduce its workforce by approximately 900 employees with the reductions occurring primarily in the Philippines.
"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. Additionally, we'll further our efforts to reduce costs and improve operational efficiencies," said Tom Werner, SunPower chief executive officer and president. "With this aggressive reorganization plan, SunPower is well positioned to lead the solar market due to our world leading technology and products, significant downstream presence in multiple end segments and ability to open new market opportunities."
The company continues to make strong progress on its cost reduction roadmap and remains committed to reaching its cost per watt goal of less than $0.75 per watt on an efficiency adjusted basis for SunPower's lowest cost solar panels by the end of 2012. The company's previously disclosed Fiscal Year 2012 earnings guidance remains unchanged. SunPower will provide additional details on its strategic initiatives during its third quarter 2012 earnings conference call on Nov. 1, 2012.
SunPower expects to record restructuring charges totaling $10 million to $17 million, composed of severance benefits, lease and related termination costs and other associated costs, the majority of which will likely be in the fourth quarter 2012. The company expects that greater than 90 percent of these charges will be cash.