The largest solar manufacturer globally has decided to downsize its workforce by almost a third following an unsuccessful cost-cutting initiative, which included instructing employees to print only in black and white. This move comes as concerns grow within the renewable energy sector.
According to Bloomberg, China’s Longi is set to reduce its workforce by up to 30%, accelerating the cost-saving measures that began late last year.
The number of job losses at the company, which employed 80,000 workers at its peak last year, remains uncertain. An internal tool that allowed employees to view the total staff count has reportedly been disabled.
The renewable energy industry is encountering significant challenges, particularly in the aftermath of Russia’s full-scale invasion of Ukraine in early 2022.
Moscow’s reduction in gas supplies to continental Europe has prompted governments to bolster domestic power generation, hastening the transition towards renewables.
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However, the resulting increase in energy bills has contributed to higher inflation rates, amplifying costs for renewable energy supply chains that are already strained due to the surge in demand. Concurrently, oil and gas companies have shifted their focus away from green initiatives toward traditional, high-profit fossil fuel projects.
Consequently, renewable energy firms have been pausing projects and reducing their workforce in an effort to rebalance their operations. The solar industry has a history of experiencing cycles of rapid growth followed by contraction, often influenced by government policies.
China serves as the epicentre of the global solar supply manufacturing industry. Numerous new factories are dedicated to this technology, leading to intense competition.
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Longi specializes in manufacturing wafers, a crucial component of solar panels. The company, headquartered in Xi’an in central China, has been compelled to halt investment plans and lower prices.
Before implementing job cuts, the company attempted to reduce expenses through various measures, such as cancelling complimentary afternoon tea, reducing business trip budgets, and enforcing a policy where staff could only print in black and white without permission, as reported by Bloomberg. Additionally, Longi’s Shanghai office reportedly ceased offering complimentary coffee.
