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Sovello announces significant job cuts

The insolvent Sovello AG has said that 475 of its employees will be let go. Meanwhile, negotiations are underway with "seriously" interested Asian investors. However, it is not clear if they will be concluded before August 1.

Sovello says it is in negotations with interested Asian investors.

Sovello GmbH

In a staff meeting, the German company’s management informed its workforce of the upcoming personnel changes. CEO Reiner Beutel said that due to a number of changes, which must be "swiftly" executed, the company can only retain a workforce of 495. As such, 475 employees be given the option to go to a transfer company. In a statement released, Sovello said staff reduction is a "prerequisite" for an investor solution.

"In the areas of research, development, application, production and distribution, a number of measures must be swiftly and consistently implemented, so that the material and other non-personnel costs can be adapted, to ensure that Sovello may again be in the back and remains interesting for investors," he said.

Beutel added that the financing of the company, employment plans, further qualification and other mediations are not yet clear. He said, however, that the company was responsible for informing its employees about the initial discussions with experts from the transfer company, now and in the coming weeks, to enable qualification profiles to be made.

In terms of a possible investor takeover, Beutel said that in order for the company to return to profitability and competitiveness, it must develop its technological strengths – solar wafers – with the support of a suitable investor. It is about to enter another week of negotiations with seriously interested investors in Asia.

"Currently we cannot predict yet whether we can successfully complete negotiations with an investor before August 1," said Beutel. The chairman of the board made it "abundantly clear", however, that an investor solution must be signed "within weeks", in order to preserve the around 500 jobs at Sovello and prospects at the solar plant in Bitterfeld-Wolfen.

On May 14, Sovello submitted an application to open self-administration insolvency proceedings at the Dessau district court in Germany, due to a lack of funds. It then unveiled a redevelopment concept, which included finding an investor, evaluating costs, and continuing production, aimed at bringing the company back to solvency on May 15.