SunPower SPWR-Q plans to reduce its workforce by about 1,000 people in the coming days and weeks and shut certain business segments as part of a restructuring to help lower costs, the solar power generation company said on Wednesday.
The development comes a day after the company disclosed it identified misstatements in its results for fiscal 2022.
SunPower said it will wind down its SunPower Residential Installation locations and close SunPower Direct sales.
The company, which had 3,800 full-time employees globally prior to the job cut announcement, expects charges of about $28 million related to severance benefits, early contract terminations and certain write-offs.
SunPower cited the slower-than-expected recovery in demand across markets for the decision and said it is moving to a low fixed-cost model to better withstand market oscillations.
Companies providing solar power and storage solutions have seen rising inventory levels and metering reforms in California weigh on demand. The metering reform lowered the tariff residential customers receive from the grid, dampening demand for solar setups.
SunPower’s restructuring plans are likely to be completed by the second quarter.
The steps are being taken to simplify the business structure, transitioning away from areas where the company has been unable to sustain profitable operations, and improving financial controls, SunPower’s Principal Executive Officer Tom Werner said in a letter to employees.