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SunPower Halts Production, Slashes Workforce

US solar firm SunPower has suspended operation of half of the 12 production lines at its 330MW Fab 2 solar cell manufacturing plant in the Philippines, cutting 900 jobs.

Those jobs amount to about 17 percent of the company’s global workforce, and the production halt accounts for 20 percent of their solar production capacity in the Philippines, cutting around 900 jobs, or.

Overcapacity continues to trouble PV panel manufacturers, and demand from Europe – the world’s largest consumer of PV panels – has declined thanks to reduced subsidies for renewable energy. As a result, prices of solar panels have dropped 30 percent this year, cutting down industry profits.

Manufactured by Silicon Energy, LLC, in Washington State, a strong new photovoltaic module made with DuPont™ PV5300 Series encapsulants is ready to withstand wind and snow. Credit: Dupont PV Solutions.

“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,” said SunPower CEO Tom Werner.

“Additionally, we’ll further our efforts to reduce costs and improve operational efficiencies. 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,” he added.

SunPower, which is largely owned by French oil company Total SA, shut down Fab 1, another solar cell factory in the Philippines, this past April to further streamline its manufacturing process at its two other plants in the country, with the same aim of cutting costs to make its product more price competitive.

The company had a total workforce of approximately 5,220 employees globally as of January 1, with 4, 130 located in the Philippines. It has stated that most of the 900 job cuts would be in that country, but did not specify where the other job cuts would occur.

Many of SunPower’s main rivals are Chinese manufacturers who are selling less efficient solar panels at far lower prices, which has prompted a trade complaint against Chinese solar manufacturers, resulting in the US Department of Commerce’s imposition of stiff tariffs on its imported silicon PV cells.

But despite this temporary decline in production, SunPower says it expects to maintain progress on its cost reduction scheme, and remains focused on hitting its $0.75 cost per watt goal by the end of 2012.

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