German company Q-Cells, the world's second-largest solar-manufacturing company, announced layoffs today of 500 employees and the closure of some production lines to offset its operating losses. "The business performance shows how quickly and dramatically the markets have changed for us," said CEO Anton Milner, describing financial pressures from a global oversupply of silicon and project-funding woes.
Company sales through the end of June fell 37 percent compared with the same period last year. Combined with an operating loss of €47.6 million for the first six months, the company operated at a loss of €696.9 million.
The solar industry is facing a worldwide reshaping, largely from a boom in silicon supplies after material shortages earlier in the decade.
Milner described a three-pronged approach he dubbed "Q-Cells Reloaded" to turn the company's performance around.
Q-Cells plans to shut down production in Thalheim, Germany, where officials said older machines and inefficient operations resulted in costs that are about 30 percent higher than the competition. With the closure, 500 jobs will be shed and the company expects to reduce its production expenses by 25 percent overall.
To secure cash flow until some key contracts are renegotiated next year, the company plans to cut $300 million in investments.
It will also adjust research and development to maximize short- and medium-term prospects, officials said. Major efforts will focus on two thin-film solar companies in which Q-Cells owns controlling interests -- Solibro and Calyxo, which work with CIGS and cadmium-telluride technologies, respectively.
Milner said the company will also redouble its systems integration through its Q-Cells International branch. The company is part of a science and manufacturing park just across the U.S. border in Mexicali, Mexico, built in part to defend North American fabrication capacity.
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