Solar energy firm to cut 50 jobs in New Hampshire
Before the layoffs, the company employed 650 people worldwide, with 250 at locations in Nashua and Merrimack, according to Jeff Nestelpatt, director of marketing communications. The Nashua office at 20 Trafalgar Square serves as international headquarters and had 60 employees engaged primarily in management and administration. The Merrimack office at 243 Daniel Webster Highway employed about 180 workers engaged in research and development.
Nestelpatt said the layoffs have already taken effect, eliminating approximately 50 jobs across the two southern New Hampshire locations and another 120 jobs at locations in Asia, including Hong Kong, Shanghai and Taiwan. "We are in the process right now of providing transition assistance that our departing friends and employees need," he said.
The company announced the layoffs Wednesday as part of a larger restructuring and consolidation plan designed to reduce expenses by approximately $13 million a year. Costs associated with the layoffs add up to $4.2 million, all of which will be accounted for by the end of the year.
The news sent GTAT stock tumbling to as low as $4.03 a share on Wednesday before rebounding slightly as the day went on, according to Bloomberg News Service. The stock was trading at $6.08 in August, down from $17 in the summer of 2011.
"It is becoming increasingly clear that some of our Asian customers are experiencing severe financial difficulties brought on by a number of economic and trade-related challenges," said Tom Gutierrez, president and chief executive officer in announcing the cost-cutting efforts. "We are not immune to these headwinds and we are taking action to prepare for what is likely to be a challenging 2013 in our core markets by lowering our cost structure."
In addition to the layoffs, the restructuring combines what had been separate business units for photovoltaic, polysilicon and sapphire products into a consolidated Crystal Growth Systems group, with one president reporting directly to Gutierrez.
The company predicted that revenue in the third quarter will be at the low end of its forecasted range of $110 million to $140 million, down from second-quarter sales of $167.3 million.
According to Reuters, Asia contributed 95 percent of the company's revenue of $955 million in the fiscal year ending in March.
"Chinese solar companies have been battered by a steep fall in prices for solar equipment," Reuters reported. "They have also been slapped with import duties in the United States and face similar action from the European Union."
The market for solar has been further eroded by the controversy surrounding Solyndra, the failed solar-panel maker that received a $535 million in U.S. Energy Department loan guarantees before going bankrupt.
"Unfortunately, this whole process has become politicized, and it's cast a cloud over the promise of what solar energy can be ... of what renewables can be," Nestelpatt said.
GTAT, which started 18 years ago in Nashua as GT Equipment Technologies, later became GT Advanced Technologies. Founded by two Nashua engineers in a basement with $1,000, it grew over the years into a $1 billion business.
Nestelpatt predicts that those growth years will return. "There's no question," he said. "If you look long-term, this technology is not going away. It's only going to get better, become more efficient and become lower cost. These kinds of imbalances between supply and demand are fairly common for any new industry."
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Dave Solomon may be reached at email@example.com.