SolarEdge Technologies (NASDAQ:SEDG) announced plans to shut down its Energy Storage division to focus on core solar operations.
SolarEdge plans to cut around 500 jobs in South Korea as part of the discontinuation, mainly in manufacturing roles. This represents about 12% of the company’s workforce, with most layoffs occurring in the first half of 2025.
The company anticipates recording pre-tax charges of $81 million to $99 million. These include $40 million to $49 million in asset-related and impairment charges, $30 million to $37 million for inventory write-offs and non-cancelable purchase orders, and $4 million to $5 million for severance and related benefits (excluding stock-based compensation expenses).
Workforce reductions and related charges will be recorded in the fourth quarter of 2024 and in the first quarter of 2025, with cash payments related to these charges of $38 million to $46 million expected, mainly for severance and non-cancelable orders. Asset sales, including facilities in South Korea, aim to offset these costs. Additional expenses may arise.
Ronen Faier, Interim Chief Executive Officer of SolarEdge, commented: “The decision to close our Energy Storage division was the result of a thoughtful analysis of our portfolio of businesses and product lines, industry trends, and the competitive environment. The measures also represent continued execution of two of our main priorities: financial stability through cost reduction, return to cash flow positivity and profitability; and focus on our core business lines of solar, PV-attached storage and energy management capabilities.”
Price Action: SEDG shares are trading higher by 6.06% at $14.52 at the last check Wednesday.
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