Sunpower to cut 1,000 jobs, admits misstatements in financial results for 2022

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The job cuts are due to slow recovery for its business and the market. Image: SunPower.

US residential solar provider SunPower has announced that it will reduce its workforce and close business segments, which are the latest steps to simplify its business structure and lower costs.

In a note to staff which was shared on the company’s website, SunPower’s principal executive officer Tom Werner said about 1,000 jobs will be cut in the coming days and weeks, while the divisions SunPower Residential Installation (SPRI) locations and SunPower Direct sales will be closed.

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SunPower’s annual report shows that the company had about 4,710 full-time employees as of 1 January 2023. Of these employees, about 3,480 were based in the US, and about 1,230 were located in the Philippines.

Werner said the market recovery has been slower than the company initially expected. Therefore, SunPower is “moving to a low fixed-cost model” that will enable the company to “better flex when the market is up or down”.

Meanwhile, the layoff will incur restructuring charges totalling about US$28 million, consisting of approximately US$14 million in severance benefits and approximately US$14 million related to early contract termination and certain write-offs. The restructuring plan is expected to be completed by the end of the second quarter of 2024.

Prior to this, SunPower announced that it had breached a credit agreement in December 2023, sparking concerns over its ability to stay in business.

In February, the company even announced that then CEO Peter Faricy had left the company without mentioning the reason for his departure.

Misstatements in financial results

Aside from the restructuring, SunPower also announced that it had identified misstatements in financial results for the fiscal year 2022. The misstatements primarily relate to the capitalisation of certain deferred costs that did not qualify for capitalisation, the classification of certain sales commissions as cost of revenue rather than sales, general and administrative expenses and certain other individually immaterial adjustments.

SunPower expects a US$15 million-US$25 million decrease in income from continuing operations before income taxes and other adjustments for the fiscal year 2022. The company is planning to restate financial statements for the affected period “as soon as practicable”.

The company posted a lowered customer growth for four quarters in a row and a net loss of US$247 million for FY2023.

Last year, class action lawsuits were filed against SunPower amidst allegations that the company misled investors by failing to disclose that it had inaccurately reported the cost of revenue and inventory metrics.

The solar company revealed an internal control problem on 24 October 2023, saying that “in connection with the preparation of the financial statements, the company preliminarily determined that the value of consignment inventory of microinverter components at certain third-party locations had been overstated in the range of approximately US$16-US$20 million”.

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