SolarEdge Technologies (NASDAQ:SEDG) announced on Sunday that it is reducing its workforce, affecting approximately 16% of its global employees, or around 900 staff members, as part of cost-cutting measures.
Shares rose 6.2% on the news.
This decision follows the company's discontinuation of manufacturing operations in Mexico, a decrease in manufacturing capacity in China, and the termination of its light commercial vehicle e-mobility activity.
In November, SolarEdge cut its revenue outlook for the fourth quarter of 2023 due to weak demand for its solar inverters.
The company initially projected Q4 2023 revenue at $325 million, marking a 55% decline from Q3 and a 64% drop from the previous year. Analysts, however, currently estimate Q4 revenue at $371 million, with SolarEdge expected to incur a loss of $1 per share, according to the FactSet consensus.
SolarEdge posted a Q3 loss of 55 cents per share, contrasting with its earnings of $2.86 per share in Q4 2022.
The slowdown in solar growth in Europe, driven by excess inventories and weakening demand, and the impact of higher interest rates and metering reform in California, the largest solar market in the U.S., have contributed to the diminished demand for solar products.