SolarEdge to Cut Workforce by 16%

Photo above: Zvi Lando, Chief Executive Officer of SolarEdge

SolarEdge Technologies announced a restructuring plan designed to reduce operating expenses and align its cost structure to current market dynamics. The workforce reduction impacts approximately 16% of the SolarEdge global workforce, or approximately 900 employees, of which approximately 550 are from the Company’s offices and a manufacturing site in Israel. The reduction follows measures which the Company has already taken to align its operations, including discontinuation of manufacturing in Mexico, reduction of manufacturing capacity in China, and termination of the Company’s light commercial vehicle e-mobility activity in Italy.

SolarEdge creates smart energy solutions for solar power market, including intelligent Inverters and Optimizers for photovoltaic (PV) systems, Storage solutions, EV charging, Batteries and Grid Services solutions. During the third quarter 2023 the company witnessed sharp and unexpected decline: Q3 revenues dropped down by 27% compared with the prior quarter to $725.3 million, and down 13% from $836.7 million in the same quarter 2022.

“The results for the third quarter are reflecting a slow market environment,” said Zvi Lando, Chief Executive Officer of SolarEdge. “During the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and pushouts of existing backlog from our European distributors. We attribute these cancellations and pushouts to higher than expected inventory in the channels and slower than expected installation rates.

“In particular, installation rates for the third quarter were much slower at the end of the summer and in September where traditionally there is a rise in installation rates.” Additionally, the Company anticipates significantly lower revenues in the fourth quarter of 2023 as the inventory destocking process continues. Following the announcement of the restructure plan, SolarEgde stock in NASDAQ rose by approximately 3% and the company is traded in a evaluation of $3.9 billion.

SolarEdge Expects Tough Quarters Ahead


SolarEdge Technologies announced exceptional results for Q1 2020: It had achieved record revenues of more than $430 million, with gross margin of 32.5% and net income of $50.7 million. “Despite the challenges triggered by COVID-19 during the quarter, we were able to get products to our customers and satisfy demand,” said Zvi Lando, CEO of SolarEdge. But the second quarter is expected to be different: The company’s outlook for the Second Quarter 2020 is of revenues within the range of $305-$335 million and gross margin of 30%-32%.

Based in Herzliya, Israel, SolarEdge provides intelligent inverter solutions for photovoltaic (PV) systems, monitoring platform for PV installations, and other smart energy solutions. During the conference call following the report last week, Lando revealed that during the COVID-19 impacted month of March and April, installation rates of SolarEdge products outside of the US increased by 15% compared to the same period last year.

“Installations in Italy, historically a strong SolarEdge market, declined by 47%. In the last three weeks, however, the installation rates there have started to rise again. In the Netherlands, where we are the market leader, our product installations are flat when compared to March and April of last year. The most positive data comes from Germany where our product installations during this period were up 42%. In the US, during the same period, the installation rate of our products declined by 16% compared to March and April of 2019.

SolarEdge three phase inverters
SolarEdge three phase inverters

“While it is difficult to foresee how long this downturn will last, we are preparing for various scenarios. In addition, effective April 1, our senior executives voluntarily reduced their base salaries by 20%.” Ronen Faier, Chief Financial Officer, said the company plans to reduce its operating expenses to the level of Q3, 2019 (app. 20% lower): “As part of our reaction to the economic slowdown that we are already seeing from COVID-19, we have reviewed carefully our business plan for 2020 and implemented certain cost-cutting measures.

“It includes a reduction in executive management’s base salary, general halt on recruitment and freeze on salary increases, which were planned for April. In addition, we are eliminating workforce redundancies and adjusting our headcount and to the reduced level of activity in certain regions as well as renegotiating other expenses such as rental agreements and consulting services. Some of these adjustments are still ongoing and the effect will be seen in our operating expenses for Q2 and Q3.”

SolarEdge stock in NASDAQ. Source:
SolarEdge stock in NASDAQ. Source: