SMA Solar has announced a restructuring and transformation program for its global operations
It will entail job cuts and adjustment of the company’s structure to enable profitable operations
The management sees this as a crucial time to opt for a decisive organizational and strategic course for the company
Leading solar PV inverter manufacturer SMA Solar Technology from Germany has initiated the process of a company-wide restructuring and transformation program to financially stabilize the company. Cost-cutting measures under the plan will lead to job cuts.
The company targets to achieve cost savings of around €150 million to €200 million with this program through 3 key action areas, namely:
optimization of the company's cost structure,
adjustment of the organizational and operational structure, and
strategic repositioning of the company on the market.
It believes these steps will enable the company’s profitable development, ‘even in a market environment that remains volatile.’
“With the restructuring and transformation program that has now been initiated, we will stabilise SMA financially in the short term on the one hand and realign the medium and long-term business strategy on the other,” said SMA CEO Jürgen Reinert. “However, this will require considerable cost savings, which will also make job cuts likely.”
SMA Solar has been battling challenges arising from high inventories with its distributors and installers, along with a drop in demand in the home solutions as well as commercial & industrial (C&I) segment. It impacted the company’s H1 2024 results, even though it maintained FY 2024 financial guidance (see ‘Challenging Market Conditions’ Spoil H1 2024 For SMA Solar Technology).
SMA CFO Barbara Gregor added, “Our top priority is to increase profitability and sustainably strengthen the company's financial stability. At the same time, we are keeping a firm eye on the future and setting a decisive organisational and strategic course. It will now be crucial to quickly concretise our ambitious plans and then implement them in a disciplined and consistent manner.”
The official statement does not mention the company’s upcoming 3.5 GW annual capacity solar inverter manufacturing factory in the US, which is expected to create up to 200 new jobs in the initial 3 years.
SMA’s fellow German PV companies are in no better position as they confront financial challenges along with the impact of low solar demand on their business in times of low electricity prices post-COVID. Solar and storage systems company Bosswerk has hired a restructuring specialist, blaming low prices for declaring insolvency (see German Solar & Storage Systems Supplier Files For Insolvency).
Recently, the European solar PV manufacturer with Germany as its manufacturing location, Meyer Burger, also announced 19% job cuts under its restructuring program to aim for profitability.
While stepping down, Meyer Burger’s CEO Gunter Erfurt wrote a long note on his social media blaming the European policymakers for not acting fast enough on a strong industrial policy to bring back PV manufacturing to the continent. He accused European politicians of being ‘too afraid of China’ and by not acting on the opportunity, they have ‘sacrificed’ an industry of the future to China, a step he warned will be regretted one day (see Gunter Erfurt Leaves Meyer Burger As Company Initiates Restructuring).