First Solar Inc., the largest thin- film panel maker, will cut 30 percent of its workforce, about 2,000 jobs, as demand in Europe slows faster than the company can expand in emerging markets in Asia. The shares surged.
Most of the jobs to be eliminated will be at a factory it’s closing in Germany and in Malaysia, where it’s idling four production lines, the Tempe, Arizona-based company said today in a statement. The company will pay $245 million to $370 million in severance and related costs.
The restructuring will help First Solar shift away from the world’s largest markets in Europe, where competition from cheap Chinese panels and declining subsidies make rooftop sales unprofitable. The company is seeking to develop large, ground- mounted power plants that will use its panels in sunny regions such as India and the Middle East.
The impact of subsidy cuts “on utility-scale solar projects is particularly punitive even though utility scale is the most cost-efficient way to add solar to the grid,” Chief Financial Officer Mark Widmar said today on a conference call with analysts and investors. The cost reductions resulting from the closings “will enable us to invest in new emerging markets where we anticipate achieving significant growth.”
First Solar rose 10 percent to $22.96 at the close in New York, the most since Jan. 27. The shares have declined 32 percent this year.