SolarEdge to Lay Off 400 Employees After Signing Major Solar Energy Contracts; Shares Surge
FREMONT - SolarEdge Technologies (NASDAQ: SEDG), a significant player in smart energy solutions, announced a restructuring plan aimed at reducing its global workforce by approximately 400 employees. This decision, publicly disclosed on January 6, 2025, is part of the company's efforts to improve operational cost efficiency and resource allocation to enhance its performance and financial stability.
SolarEdge shares rose by 6.5% in pre-market trading on Monday. The company anticipates that the restructuring will incur a pre-tax expense ranging from $3 million to $5 million, primarily consisting of severance and other one-time layoff payments. These expenses are expected to be cash-based, largely recognized in the first quarter of fiscal year 2025, with the remainder recorded over the fiscal year.
The workforce reduction is subject to local regulations, and upon completion, SolarEdge is expected to save approximately $9 million to $11 million per quarter. These savings do not include the overall costs associated with implementing the restructuring plan.
In a separate development, SolarEdge signed safe harbor agreements with two leading residential solar installation and financing companies in the U.S., including Sunrun (NASDAQ: RUN). Announced at the end of December, these agreements will enable SolarEdge to supply domestically produced inverters, Power Optimizers, and batteries. The equipment is expected to help partners take advantage of domestic content bonus tax credits, with deliveries planned throughout 2025.
The safe harbor agreements are designed to secure investment and domestic content bonus tax credits for SolarEdge's partners, providing stability in business planning and certainty in project economics.
Additionally, SolarEdge completed its second transaction for the sale of §45X Advanced Manufacturing Production Tax Credits through the Crux platform. This transaction concerns credits generated in the third quarter of 2024, which are associated with inverters and Power Optimizers produced in the U.S. and qualify for an advanced manufacturing production credit of 11c/w.
SolarEdge's North America General Manager, Bertrand Vandewiele, emphasized the company’s commitment to supporting significant industry players with U.S.-manufactured technology. CEO Shuki Nir highlighted that these agreements and the sale of tax credits are crucial steps on the company's path to recovery, aiming to enhance business outlook and financial stability.