For the third time in a year: Solaredge lays off another 400 workers

The technology company for the field of solar energy, solaredge carries out a third round of layoffs in less than a year, and reports the layoffs of another 400 of its employees worldwide.

The company states that the purpose of the move is to reduce expenses and improve efficiency, and that it will lead to one-time costs of 3-5 million dollars in the reports of the first quarter of 2025 for various compensations and benefits.

Once the move is complete, Solaredge expects a $9-11 million reduction in its quarterly expenses.

● Another streamlining step: Solaredge is closing its energy storage division
● Analysis | In line with Nvidia: the Israeli stock that entered a prestigious club on Wall Street

Solaredge carried out its first round of layoffs in January 2023, when it said goodbye to 900 employees, of which 550 were in Israel. In July, a second round was carried out, in which 400 workers were fired, half of them in Israel. In November, it announced the closure of its energy storage operations, a move that included parting with another 500 employees in South Korea. Before all these moves, Solaredge employed 5,633 employees at the end of 2023, of which 3,160 are in Israel.

While the previous rounds of layoffs were carried out during the tenure of the previous CEO Zvi Lando, the current round is being carried out under the leadership of the new CEO Shuki Nir, who recently took office. In a letter to the employees, Nir wrote that “We strongly believe in the great opportunities that Solaredge has in the long term. However, we must face the challenges of 2025: achieve the financial stability required to execute a turnaround and meet the organizational goals that will support growth.”

According to him, at this stage the company must reduce its operating expenses, even after the previous cutbacks and the reduction of the number of employees in the past year. He stated that the layoffs will be in all departments. “We understand how difficult and painful the period is for the Solaredge team, and I have no doubt that you will show compassion to each other and support colleagues who will be hurt. Our goal is to support the employees as much as possible.”

The problems come in bunches

Besides the layoffs, Nir added that the company is considering additional organizational measures to further cut costs, and will announce this later.

“I can imagine that many of you are asking yourselves how we got to this point, and more importantly, how we can ensure that it doesn’t happen again after everything we’ve been through in the past year,” wrote Nir. “I want to make it clear that these steps are absolutely necessary, in order for the company to come out stronger and more durable.”

According to him, the company has already made significant progress in the process of achieving financial stability. In this context, he indicates agreements that will allow Solaredge to benefit from the fact that it produces in the US as well as for selling tax benefits.

As mentioned, the company suffers from significant challenges in the market in which it operates, which led to a decrease in its results. The weakness comes against the background of the accumulation of large stocks among the distributors of the company’s products, which led to a decrease in new orders from it.

At the same time, there was a slowdown in market demand. As a result of the situation in which it found itself, Solaredge carried out two rounds of layoffs from the beginning of 2024: in January it fired 900 employees, of which 550 were in Israel; And in July it fired 400 workers, half of them in Israel. It recently took efficiency measures, when on the one hand it announced the closure of its activity in the field of energy storage, which was a loss-making area – a move that will reduce its workforce by another 500 people; On the other hand, she started looking for subtenants for the campus that Azrieli is rapidly building for her.