Chinese solar PV manufacturing giant LONGi Green Energy Technology is planning to downsize its global workforce by 5%, a move that directly reflects the volatile dynamics in the solar industry.
LONGi issued a statement in response to 'information circulating online' regarding the company's '30% layoff plan' calling it 'false'.
Recently, a Bloomberg news report claimed the manufacturer will lay off 30% of the staff out of some 80,000 strength. It further added that the company has been gradually laying off 'thousands of people' since November 2023, mostly comprising management trainees and factory hires.
In an official statement, LONGi said it may act on the plans going by the increasingly competitive environment. This 'optimizing' its workforce will help the company 'adapt to market changes and improve organizational efficiency.'
During the energy crisis, like many other Chinese companies, LONGi increased its manufacturing capacities dramatically. At the end of 2021, the company's production capacity for wafers, cells and modules had reached 105 GW, 37 GW and 60 GW respectively, while 2022 capacity targets increased to 150 GW, 60 GW and 85 GW.
It also heftily expanded its operations abroad, hiring away many employees from competitors at a time when the demand was so much higher than supply.
By the end of 2023, it was targeting to further expand its wafer capacity to 190 GW, and module capacity to 130 GW, according to information on its website.
In an official statement, LONGi said it may act on the plans going by the increasingly competitive environment. This 'optimizing' its workforce will help the company 'adapt to market changes and improve organizational efficiency'.
Globally, the solar PV industry is currently going through a phase of severe overcapacity that has led to significant drops in module prices – by around 50% over the course of 2023 – that are barely profitable. While global module manufacturing capacities have increased to the TW level, utilization was down to 49% for the top 9 Chinese module makers and 23% overall, according to the Chinese PV Industry Assocation (CPIA) (see China's Solar PV Output In 2023 Exceeded RMB 1.7 Trillion). Also this year, manufacturers will suffer from these overcapacities. Bloomberg NEF expects solar installations to grow again significantly by 29% to 572 GW (see BNEF Counts 444 GW DC New Solar PV Capacity Additions In 2023).
But this faces around 750 GW of module production output, according to CPIA (see Chinese Solar Industry To Get Bigger & Better In 2024).
A strong consolidation in the sector is taking place – in particular for the lower tier and fairly new manufacturers, but also the prime group. Leading Chinese manufacturers are also increasingly hitting brakes on their expansion plans. Jolywood, for example, has put its 200,000 ton industrial silicon and 100,000 ton high-purity polysilicon fab on hold (see China Solar PV News Snippets). Lingda Group too has announced a delay in the start of production for phase I of its 20 GW high-efficiency solar cell production base (see China Solar PV News Snippets). Canadian Solar decreased its expansion targets twice in recent months (see Canadian Solar Beats Q4/2023 Solar Module Shipment Guidance).
More and more companies, especially those producing polysilicon, have reported negative impact on the business during 2023 due to lower ASPs, including GCL Technology (see Chinese Polysilicon Supplier's 2023 Annual Revenues Decline).
LONGi is yet to release its audited financials for FY 2023. During Q3/2023, its operating revenues dropped by 19% annually to RMB 29.44 billion ($4.1 billion), while it net profit attributable to shareholders of listed companies went down by over 44% to RMB 2.5 billion ($350 million).
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