SunPower (NASDAQ:SPWR) has announced Wednesday it is planning to lay approximately 25% of its workforce, which accounts to about 2,500 employees. In addition the company will close one of its plants, all in the effort to cut costs to counter falling prices. The company’s average seeling prices declined about 25% in the third quarter 2016.
SunPower’s cost-cutting plan is to cut operating expenses in 2017 to about $350 million, comparing to $450.9 million in 2015. The company’s shares, down 77% this year, rose 2.6% to $7.14 in recent premarket trading.
The company had already eliminated 1,200 jobs earlier this year, and last month it had warned that the latest cuts were coming when it’s also slashed its 2016 sales guidance citing challenges in the broader solar industry.
Solar companies have been hard hit after stiff competition pushed prices of solar panels lower and as customers held off purchases in the hope of a further decline in prices.
According to SunPower, the cost-cutting plan is expected to generate positive outcome by the end of 2017. The company expects to generate positive cash flow from operations through the end of 2017 and exit the year with about $300 million in cash.