Longi Green Technology Energy, the world's leading solar manufacturer based in China, has announced plans to reduce its workforce by approximately 5 per cent. The company stated, "Currently, the solar photovoltaic industry is facing an increasingly complex and competitive environment. In order to adapt to market changes and improve organisational efficiency, the company is optimising our workforce,” according to a report by the news agency Reuters.
The company asserted that online rumours regarding its intention to lay off 30 per cent of its workforce were untrue after Bloomberg reported otherwise, citing insider sources, stating that Longi intends to reduce nearly one-third of its staff as a cost-saving measure. According to the report, Longi's workforce numbered approximately 80,000 individuals last year, whereas Longi's website indicates that the company had 60,601 employees as of April 2023.
The layoffs signify a shift in direction following years of rapid expansion by Longi and other Chinese firms, which had positioned the country as the epicentre of global solar manufacturing. Their achievements have played a crucial role in combating global warming, propelling solar energy to become the fastest-growing energy source worldwide. However, this success has also brought about two adverse outcomes for Chinese manufacturers.
Firstly, solar energy has become a focal point of global trade tensions, mainly as countries like the US grew uneasy about relying heavily on China for essential equipment in the energy transition. Secondly, the rapid expansion of factories has outstripped demand, leading to a steep decline in prices that has squeezed profit margins for manufacturers.
Amidst global overcapacity in the solar industry and plummeting solar cell prices, solar manufacturers find themselves compelled to sell their products at or below production costs. According to reports, officials at a recent meeting of the China Photovoltaic Industry Association (CPIA) stated that the decline in prices has prompted companies to either cancel or delay planned investments and initiate workforce reductions.