New CEO, David King has said that on the back of continued oversupply, and the U.S. and European anti-dumping investigations, the photovoltaic module manufacturer has temporarily reduced its photovoltaic cell capacity to 1.8 GW, down from 2.4 GW. The companys module and wafer capacities will remain at 2.4 GW and 1.6 GW, respectively.
In a statement released, Suntech said around 1,500 employees are expected to be affected by the move. While the "majority" will be offered positions at other production locations, an undisclosed number will be provided with severance packages.
Chinas online news agency "ne21.com" has reported that a number of employees from Wuxi have gone on strike to demonstrate their dissatisfaction over the redundancy payments. The article added that the company has previously laid off over 4,000 jobs around 30% of its workforce. It is not clear, however, when these layoffs were made.
"With a smaller manufacturing base we will be able to lower production cost, increase utilization rates and improve product performance. With these and other initiatives we target to create a sustainable business model and return to positive operating cash flow in 2013," commented in today’s statement King.
Suntech is aiming to reduce this years operating expenses by 20%, in comparison to 2011. "Impairments related to the closure of facilities, severance payments and other related expenses are currently being assessed and will be disclosed in the Company’s third quarter 2012 earnings report," continued the statement.
Suntech declined to provide any additional information.