Until the end of 2025
SMA Solar announces cuts of up to 1,100 jobs
November 14, 2024 – 2:59 p.mReading time: 2 min.
SMA Solar announces that it will cut 1,100 jobs by the end of 2025. The savings measures will probably mainly affect German locations.
The ailing solar technology manufacturer SMA Solar wants to cut around 1,100 jobs worldwide by the end of 2025, meaning one in four full-time positions. Two thirds of the planned workforce reductions affect the company headquarters in Niestetal in the Kassel district, as SMA Solar announced. In total, a good 700 jobs could be lost there.
At the end of September, SMA Solar still had around 4,500 employees in 20 countries worldwide, including more than 3,200 in Germany. The planned staff reductions still have to be coordinated with the employee representatives, it was said. The company produces, among other things, inverters for photovoltaic systems.
SMA Solar announced the savings program with a volume of 150 to 200 million euros in September, but did not provide any details at the time. The background is problems in the business with private and commercial solar systems. Some of the savings have been implemented through probationary terminations and in the subsidiary in Poland since September, it said.
In 2023, SMA Solar had significantly increased sales and earnings, thanks, among other things, to high demand. Sales rose by 79 percent to 1.9 billion euros (previous year: 1.06 billion euros). The bottom line is that the company recorded a profit of 225.7 million after 55.8 million euros in 2022.
This year, business is doing significantly worse. In the first nine months of 2024, sales fell by over a fifth to just under 1.1 billion euros compared to the same period last year. Only revenue from large projects grew, while business with private and commercial customers declined. The consolidated result was 34.7 million euros (same period last year: 180.4 million euros).
How might SMA Solar’s decision to reduce jobs influence competition in the solar industry?
Time.news Editor: Welcome to the Time.news interview segment! Today, we have with us Dr. Clara Weiss, an expert in renewable energy and labor market dynamics. We’re discussing the recent announcement from SMA Solar about their decision to cut up to 1,100 jobs by the end of 2025. Thank you for joining us, Dr. Weiss.
Dr. Clara Weiss: Thank you for having me. It’s a pleasure to be here.
Editor: Let’s dive right in. SMA Solar announced this significant job reduction despite reportedly increasing sales in 2023. What do you think is driving this decision?
Dr. Weiss: It’s certainly a complex issue. Although SMA Solar reported increased sales, which typically suggests a healthy business, there might be underlying challenges, such as increased competition in the solar industry or rising costs of materials. This could lead to a necessary restructuring to maintain profitability and competitiveness.
Editor: Interesting point. The company indicated that two-thirds of these job cuts will affect its headquarters in Niestetal, Hesse. What impact will this have on the local economy?
Dr. Weiss: The local economy could feel a significant blow from the loss of 700 jobs in Niestetal. Such layoffs can lead to decreased consumer spending, increased unemployment rates, and heightened anxiety within the community. It’s a tough time for families and could have a broader ripple effect on local businesses that rely on those employees for patronage.
Editor: Given that SMA Solar is a major player in solar technology, how do you see this situation affecting the solar industry as a whole?
Dr. Weiss: This could have both a positive and negative impact on the solar industry. On one hand, it could lead to more competition as other companies try to fill the void left by SMA Solar. On the other hand, it may instill uncertainty in the market, potentially affecting investor confidence and innovation. If more companies follow suit regarding workforce reductions, it could stifle growth in renewable energy sectors, which are essential for transitioning away from fossil fuels.
Editor: SMA Solar’s announcement comes at a time when many companies are vying for positions in the renewable energy sector. What strategies do you think they could adopt to mitigate the fallout from job cuts?
Dr. Weiss: A few strategies might help SMA Solar navigate these tough waters. First, they could invest in training and upskilling for their current employees, ensuring that wherever possible, layoffs aren’t permanent. Additionally, diversifying their product range or exploring new markets could help stabilize the company financially. Engaging in transparent communication with employees and the community is also crucial to maintaining trust.
Editor: As we look to the future, what advice would you give to employees in the renewable energy industry who may be concerned about job security?
Dr. Weiss: It’s important for employees to stay informed about industry trends and to be adaptable. Continuous learning and professional development in areas such as energy storage, smart grid technology, and sustainable practices can make them more valuable, regardless of their current position. Networking within the industry can also open doors to new opportunities should job security become a concern.
Editor: Wise words! Thank you for shedding light on this critical issue, Dr. Weiss. What’s your outlook for the renewable energy sector in the coming years?
Dr. Weiss: While the immediate outlook can be turbulent, I believe the long-term prospects for the renewable energy sector remain bright. Global initiatives to combat climate change are going to drive demand for solar and other renewable technologies. However, the path to achieving this growth will require strategic planning, investment in workforce development, and sometimes painful decisions like the ones we see with SMA Solar.
Editor: Thank you again, Dr. Weiss, for your insights today. This discussion on the current state of SMA Solar and the broader implications for the renewable energy industry has been enlightening.
Dr. Weiss: Thank you for having me, and I look forward to future discussions on this pressing topic.