The world’s largest solar manufacturer has slashed nearly a third of its workforce after a cost-cutting drive that included telling staff to only print in black and white fell short and as a chill ripples through the renewable energy sector.
China’s Longi is to cut as much as 30% of its workforce, in an acceleration of cost reductions that began late last year, Bloomberg reported.
It is unclear exactly how many jobs will be lost at the company, which employed 80,000 at its peak last year, as an internal function allowing employees to see the total number of staff has reportedly been disabled.
The renewables industry is facing significant headwinds in the fallout from Russia’s full-scale invasion of Ukraine in early 2022. Moscow’s reduction in gas supplies into continental Europe left governments scrambling to beef up domestic power generation, accelerating a shift towards renewables.
However, the resulting higher energy bills pushed up inflation rates, adding costs to renewables supply chains already under pressure from the surge in demand. Meanwhile, oil and gas companies have retrenched from green projects in favour of traditional high-margin fossil fuel projects.
As a result, renewables companies have been pausing projects and cutting jobs in an attempt to rebalance their portfolios. The solar industry has a history of boom-and-bust cycles, dictated typically by government policies.
China is the centre of the world’s solar supply manufacturing industries and a proliferation of new factories dedicated to the technology has created fierce competition.
Longi manufacturers wafers – a component used in solar panels. The company, based in Xi’an in central China, has been forced to suspend investment plans while also cutting prices.
Before the job cuts, the company previously tried to reduce costs through a series of smaller measures. These included cancelling free afternoon tea, cutting business trip budgets and informing staff that they must only print in black and white unless they received permission, Bloomberg reported. Longi’s Shanghai office has reportedly stopped offering free coffee.
The solar company’s net income fell sharply last year, down by 44% to 2.52bn yuan (£275m) in the third quarter of 2023. Its shares have fallen about 70% from their 2021 peak.
Longi has been contacted for comment.
