First Solar Inc. says the layoffs amount to 30 percent of its global workforce. Some cuts come from shutting down production lines in Malaysia and closing a factory in Germany. The company will also cut additional jobs in both Europe and the U.S.
First Solar says its manufacturing costs should drop by $30-$60 million this year and another $100-$120 million a year afterward. It will book a restructuring charge of $245 to $370 million.
The Tempe, Ariz., company says the cuts are necessary to cope with deteriorating demand in Europe, which has been the biggest market for solar panels.
However, what’s odd about the Associated Press report is the fact that there’s no mention of the $3.1 billion in federal loan guarantees First Solar was awarded back in 2011. We assume the billions were given with the understanding that First Solar, "America's largest solar panel manufacturer," would boost the economy and create jobs.
Not so much.
And there’s no mention of that time First Solar (via the infamous Export-Import Bank) was awarded $455.7 million in additional funds to sell solar panels to itself. And there’s no mention of that time former CEO Rob Gillete's unexpected resignation sent the company's stock into a downward spiral.
What we’re trying to say is that maybe -- just maybe -- First Solar was a poorly run company from the start and the mass layoffs have nothing to do with Chinese competition and “waning demand” but everything to do with lousy management and structuring.
But should this come as a surprise (not for the “green” energy industry as a whole -- although layoffs and Chapter 11 seem to be all the rage -- but for First Solar specifically)? The warning signs had been in place for some time. Consider when The Blaze reported in February:
First Solar’s stock tanked in after-hours trading on Tuesday after reporting a disappointing fourth quarter earnings report. The company saw a net loss of $413.1 million from write-downs, charges and decreased sales prices. This compares to a $155.9 million profit in the previous year.
The company’s adjusted earnings per share declined to $1.26 from $1.88 while revenues increased 8 percent to $660 million; both of these numbers missed estimates. With a weaker than expected demand, First Solar lowered its 2012 revenue guidance.
What with the plummeting stock, the CEO resignation, the billions in loan guarantees -- the surprising part might be that the layoffs didn't occur sooner.
The Associated Press contributed to this story.