SolarEdge plans 16% workforce reduction in cost-saving bid
Green energy company SolarEdge Technologies (SEDG) plans to cut 16% of its workforce in a cost-saving strategy aimed at its operating expenses. SolarEdge's stock has risen by 4% in Monday's pre-market trading session.
From the floor of the New York Stock Exchange, Yahoo Finance's Madison Mills reports on the sentiment riding over the renewable energy sector while adding SolarEdge to the list of companies implementing layoffs in 2024.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
SEANA SMITH: All right, let's get to today's stock to watch, and that is Solar Edge. The company announcing it will be laying off 16% of its workforce-- that equates to about 900 jobs-- as it looks to cut back on operating expenses, so a leaner company, also a theme that we've been hearing from Wall Street over the last several weeks. Madison Mills has more for us on the floor of the New York Stock Exchange. Maddie--
MADISON MILLS: Solar Edge laying off 16% of staff, like you mentioned, Seana. But this morning we have news about just how much that staffing change is going to cost this firm, to the tune of $59 million to $66 million just in terms of the asset allocation to pay for those layoffs and offloading that amount of staff. Now, this comes after a really tough couple of years for this name. It's down about 80% from its initial valuations when it was listed. Also, a couple of months ago, they got removed from the S&P 500 due to their low performance.
And this is a story about the solar sector. This sector has been really struggling, because it's an interest rate-sensitive sector, and that's why we're seeing a lot of the names in this space struggling, including Solar Edge. They're blaming this on lack of demand coming out of Europe in particular, due to excess inventory, weakening demand. We're also seeing that here in the States again because this is such an interest rate-sensitive sector.
But this is also a story about layoffs. This is a company that is just the latest in a growing list of firms that have laid off staff so far in 2024. We have it joining the names of Amazon, Alphabet, BlackRock, Citi, and it's interesting to see how the Street reacts when we do see companies cutting back on staff. There's usually a little bit of a dip, initially, and that's what we saw with Solar Edge yesterday. But today we're seeing some rewarding from the Street due to this cost cutting, because now the firm is going to be able to put that money back into itself and invest in itself, and that may be one reason why we're seeing this name up a little bit over 4% in today's pre market trade.
BRAD SMITH: Yeah, Madison, labor market limbo was our theme of Friday's show, and so continues to permeate even as we kick off this trading week. Maddie Mills down there at the floor of the NYSE. We'll check back in just a little bit closer to the bell.
