Otovo is undertaking another round of job cuts to lay off 46% of its global workforce
It called these layoffs necessary to achieve profitability in the current market environment
The company expects to save NOK 200 million to NOK 225 million in costs with the move
Otovo, the online marketplace for residential solar and storage installations from Norway, has announced another round of layoffs to reduce its global workforce by 46%. CEO Andreas Thorsheim termed these as ‘necessary reductions’ to achieve profitability. Previously, at the end of 2023, it laid off 15% or 65 employees of its workforce.
At the beginning of Q3 2024, Otovo’s total employee strength was 366 which will now be trimmed to around 200. This is part of Otovo’s new cost program which it estimates to help reduce its costs by NOK 200 million to NOK 225 million ($18.42 million to $20.72 million). Otovo is currently operating in 13 countries.
The management said this will bring costs down to a suitable level for current installation volumes. In Q2 2024, its installations increased by 13% sequentially, but went down by 43% year-on-year (YoY). Back then, it announced plans to cut down costs to achieve around NOK 90 million in savings in Q3 on an annual basis.
“These are necessary reductions in cost levels to bring the company to profitability in the current market environment. Combining the ongoing portfolio sale and the improvements we have done in partnerships, hardware offerings and sales method over the last year improve our robustness for 2025,” said Thorsheim.
Otovo’s business in Q1 2024 was impacted by the energy crisis affecting sales in its key installation markets. In its 2023 Annual Report, the Norwegian company stated, “Lower energy prices, high inflation and interest rates have together resulted in lower demand for solar and batteries in important markets for Otovo which again has resulted in lower sales for the Group. Should the situation continue, it may impact the Group’s results.”
The same reasons are impacting Otovo’s contemporaries in the broader European market. In August 2024, German installer Bosswerk blamed low prices for its drop in sales for going insolvent, following a similar step from Enersol (see German Solar & Storage Systems Supplier Files For Insolvency).
Installers in the North American market are not immune to the same factors pulling down demand. Recently, 2 major residential solar companies have gone bust, namely SunPower Corporation and Lumio (see US Residential Solar Installer Lumio Files For Chapter 11 Relief).