China's LONGi Group, a major player in the solar industry, is reportedly laying off a significant portion of its workforce in a bid to accelerate cost-cutting measures, according to Bloomberg. The move comes amidst fierce competition and a challenging market landscape for solar panel manufacturers.
Reports suggest that the staff reduction at LONGi Group began in November 2023, with an acceleration of layoffs in recent months, as briefed by senior management to sources who spoke with Bloomberg on condition of anonymity. The company's workforce had peaked at around 80,000 in 2023, but it is now undergoing a substantial downsizing.
While initial reports indicated a potential reduction of up to 30% of its employees, LONGi Group disputed this figure, stating that the actual job cuts would amount to approximately 5% of its workforce. Nevertheless, even a 5% reduction translates to thousands of job losses within the company.
LONGi Group attributed the workforce optimization to the need to adapt to market changes and enhance organizational efficiency, citing the intense competition prevailing in the solar industry. Indeed, China has emerged as a global leader in solar manufacturing, leading to a glut of solar panels and subsequent price declines, forcing manufacturers to operate at or below production costs. This oversupply, compounded by the competitiveness of Chinese solar panels, has posed challenges for European and US solar panel makers, hindering their ability to compete effectively.
In response to the industry's challenges, solar companies are engaging in consolidation efforts, with potential bankruptcies looming on the horizon. However, despite the current difficulties, there is optimism about the future of China's solar industry. Bloomberg Intelligence analysis suggests that the sector could witness a rebound by the end of the year, with improved margins anticipated in 2025, driven by a faster pace of consolidation and a more balanced supply-demand dynamic.
Moreover, the increasing affordability of solar panels is driving demand, leading to a surge in new installations globally. In the United States alone, a record-setting 32.4 gigawatts (GW) of solar capacity was added in 2023, indicating the continued growth and importance of solar energy in the global energy landscape.
The challenges faced by LONGi Group and other solar manufacturers underscore the complexities of operating in a highly competitive industry characterized by rapid technological advancements and shifting market dynamics. As the solar sector navigates through these challenges, companies will need to remain agile and innovative to sustain growth and remain competitive in the evolving energy market.
Based on: https://electrek.co
