Canadian Solar may cut jobs to save margins
By Swetha Gopinath
(Reuters) - Solar products maker Canadian Solar Inc (CSIQ.O: Quote) may follow bigger rivals First Solar Inc (FSLR.O: Quote) and LDK Solar Co Ltd LDK.N in cutting jobs to lower costs to offset a sharp fall in selling prices.
Canadian Solar shares, which have fallen about 67 percent in the past year, rose 9 percent to $3.50 in morning trading on the Nasdaq.
Solar companies are shuttering some production, laying off people and renegotiating raw material supply contracts to arrest a steep decline in margins, caused by an oversupply and falling government subsidies.
"We will reduce non-essential headcount where possible," Chief Financial Officer Michael Potter said on a conference call on Thursday. "We continue to re-examine our operating expenses every day."
From 2009, the number of full-time employees at Canadian Solar grew 28 percent to 9,087 as of last year. The period saw rapid development of solar plants in Asia, particularly China.
"They may not start lopping off heads but will certainly try to constrain costs on the sourcing side," Avian Securities LLC analysts Mark Bachman said.
First Solar is cutting 30 percent of its workforce. LDK Solar Co Ltd LDK.N has slashed more than 5,000 jobs this year, while MEMC Electronics Materials Inc WFR.N laid off more than 1,300 employees in December.
As a slight pick-up in demand is yet to offset falling prices, all of them are targeting costs. Continued...