Just a day after announcing it would restate the past two years of financial results, beleaguered SunPower Corp. (NASDAQ:SPWR) on Wednesday said it would reduce its workforce, cut a selection of residential installation locations, and halt direct sales, Reuters reports.
With shares down nearly 60% year-to-date, SunPower says it is seeking to simplify its business structure and move away from areas that are not sustainability profitable.
In a letter to employees seen by Reuters, SunPower Principal Executive Officer, Tom Werner, said some 1,000 people would be let go in the coming days and weeks, which will cost the company an estimated $28 million in severance pay and early termination charges.
The announcement follows a Bloomberg report on Tuesday that SunPower was planning to revise years of financial statements, citing misclassification of sales commissions and other costs. Those misclassifications are set to reduce the last two years of income by anywhere between $15 million and $25 million, Bloomberg reported, citing company filings on Tuesday. It's not the first time SunPower has revised its earnings. In 2023, earnings were delayed over a revision.
In January, SunPower said it would restructure its operations to make them more cost-effective after it was forced to scramble to raise extra cash.
"We ultimately expect this to drive more investor concern on potential covenant violations/overall mgmt. credibility given the continued challenges SPWR continues to face," analysts at Truist Securities Inc. wrote in a research note cited by Bloomberg. Despite SunPower's difficulties, overall, the solar industry in the U.S. is set to benefit from the Biden administration's Inflation Reduction Act (IRA), which is now starting to become an attractive prospect for European solar companies who are struggling to compete with cheap Chinese-made solar panels.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More