SunEdison, Inc. will be reducing its global workforce by approximately 15 percent as a response to the current and expected market conditions and to remove duplicative activities as a result of merger and acquisition, according to a SEC filing by SunEdison.
The workforce reduction is part of a restructuring that the company is conducting to optimize business operations and to accelerate cash flow positive operations.
Zacks adds that SunEdison's job cuts are due to primarily a lack of funds because of the frequent acquisitions that the company has done in the recent past.
The series of acquisitions, which was believed to be strategic, doesn't seem to hold much importance anymore.
Zacks adds the SunEdison's acquisitions are now considered ineffective because the company doesn't have the finances to fund the projects.
The company has acquired First Wind, Solar Grid Storage, and Vivint Solar, and has made alliances in several countries and won various projects.
Zacks adds that these acquisitions have a significant effect on SunEdison's balance sheet with an outstanding debt of $10.7 billion at the end of the second-quarter.
That amount nearly doubled the $5.4 billion the company had a year ago.
The outstanding debt has resulted in a huge increase in SunEdison's interest expenses, according to Zacks.
The company's interest expense was at $302 million in the first half of 2015, compared to $160 million a year ago.
Green Tech Media adds that these acquisitions didn't convince the market as SunEdison's stocks remain under pressure.
SunEdison's closing price on Oct. 6, 2015, was at $8.69, down by 3.87 percent.
Green Tech Media adds that Ahmad Chatila, the CEO of SunEdison, has sent out a company-wide memo informing them of the workforce reduction on September 30, 2015.
"Most of the changes will be announced during the fourth quarter with some final steps expected in the first quarter of 2016," Chatila said in the memo. "This process will take time to complete.
SunEdison adds in the SEC filing that they expect to incur charges of approximately $30 million to $40 million, to be recorded in the third quarter of 2015 and through the first quarter of 2016, in connection with the restructuring.
The charges will consist primarily of severance and other benefits to terminated employees.
