SunEdison to Cut 10% of Global Workforce for Business Restructuring

published: 2015-10-06 18:21 | editor: | category: News

SunEdiosn, one of the global leaders in renewable energy industry, launched “Global Initiative” for optimizing its business operations. Cutting 10-15% jobs from its global workforce is one of the serial actions.

In SunEdison’s announcement claiming to optimally position itself for long-term profitable growth, the company would take steps include three dimensions on basis of a quarterly run-rate of 1GW:

  • Focus on core, high profit-potential markets such as the U.S, India, China and Latin America,
  • Simplify its business structure by removing duplicative activities created as a result of recent M&A activities and business growth, through centralizing global business development and operations, and consolidating global support teams (e.g. finance, legal, etc.),
  • Rationalize purchased services to deliver cost reductions and capture economies of scale.

The restructuring involves in layoff of 10-15% of its global workforce, which counts approximately 7,300 employees. PV Tech cites SunEdison that the restructuring would incur total charges of approximately US$30 million to US$40 million, which would be recorded in its third quarter through the first quarter 2016 financial period. In addition, the charges would consist of severance and other benefits to employees that would ultimately end in the fourth quarter of 2016.

Ahmad R. Chatila, chief executive officer of SunEdison, and Brian Wuebbels, chief financial officer of SunEdison, will have a presentation on Wednesday, October 7, at 8:00 am EDT.

Streamline for business

PV Magazine reports that SunEdison’s share value has been slashed from US$33.45 in July to US$8.14 last week, representing around 80% of reduction. By the end of 2Q15, the company’s debt was also doubled to $10.7 billion because of a number of acquisitions, such as the acquisition of Vivint Solar. Furthermore, the business performance of TerraForm Power and TerraForm Global was not as well as expected, losing 49% if its share value to date since the date they launched IPO.

SunEdison unveiled in its financial results for 2Q15 that the cash flow was impacted by activities include investment and company operating. The company also met a net loss in the quarter – despite the loss volume was lower than 1Q15 and 2Q14. The Global Initiative could be a reaction to the poor business performance starting from 2015.

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