On Wednesday, SunPower announced its plans to reduce its workforce and shut down certain business segments as part of a restructuring plan aimed at lowering costs. This news caused the solar company’s shares to drop by 16% in premarket trading.
SunPower will cut its workforce by approximately 1,000 employees in the coming days and weeks, as part of the restructuring efforts. Additionally, the company will wind down its SunPower Residential Installation locations and close SunPower Direct sales.
The company expects to incur charges of approximately $28 million related to severance benefits, early contract terminations, and certain write-offs as a result of these changes. In a letter to employees, Principal Executive Officer Tom Werner stated that these steps are being taken to simplify the business structure, move away from areas where profitability has been unsustainable, and improve financial controls.
Overall, SunPower is working towards a more efficient and sustainable business model through these restructuring initiatives.