Tue, Mar 19, 2024 page12

• Longi plans thousands of job cuts on solar supply glut

  • Bloomberg
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  China’s Longi Green Technology Energy Co (隆基綠能) — the world’s largest solar manufacturer — is cutting almost one-third of its workforce as it tries to slash costs in an industry struggling with overcapacity and fierce competition, according to people familiar with the matter.

  Longi plans to trim as much as 30 percent of its staff that last year totaled about 80,000 people at its peak, several people familiar with the situation, including some briefed by senior management, told Bloomberg.

  The move signals an acceleration of job cuts that Longi began in November last year, when it started laying off thousands of people who were mostly management trainees and factory hires, a reaction to years of breakneck expansion across the global solar industry. It isn’t clear how many employees had been dismissed before this latest decision.

  

  Signage at the Longi Green Energy Technology Co headquarters building in Xi’an, China is pictured on March 1 last year.

  Photo: Bloomberg

  Xi’an-based Longi isn’t alone: China’s solar industry dominates global manufacturing but has suffered from layoffs and suspended investment plans in recent months. Manufacturers have been forced to sell at or below production costs after prices for solar panels fell to record lows last year. The result is that an industry seen as crucial to the global energy transition is struggling with excessive capacity, consolidation and the possibility of bankruptcies.

  Fierce competition has also forced many companies that make wafers — a solar panel precursor that is wired into cells and assembled into modules — to cut production. Longi, a leading wafer producer, had to significantly cut prices last year.

  Staff at Longi have seen previous efforts to cut costs fall short, including the cancelation of free afternoon tea, shrinking budgets for business trips and being told to only print in black-and-white unless approved to do otherwise by supervisors, the people said. Longi’s Shanghai office also stopped offering free coffee, two of the people said.

  Amid rising internal concerns about job losses by rank-and-file workers, the company late last year disabled an internal function where employees could see the total number of staff, some of the people said.

  Beyond the overcapacity and competition issues, there have been other headaches for Longi and the industry: some Chinese manufacturers have had their exports to the US held up over alleged forced labor abuses in China’s Xinjiang region, accusations which Beijing has repeatedly denied. Longi saw its American joint venture in Ohio, which it built with a local partner, face pushback as political tensions between Beijing and Washington rose.

  For Longi, the financial pressures sent its net income plunging 44 percent to 2.52 billion yuan (US$350 million) in the third quarter of last year. The company’s shares have fallen about 70 percent from their peak in 2021.
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