Solar market in decline: second wave of redundancies at Fronius
Germans and Austrians are building far fewer solar systems than expected. Fronius increases the number of redundancies from 350 to 1,000.
Inverters from Fronius
(Image: Fronius)
Fronius, the Austrian manufacturer of inverters, is once again having to lay off hundreds of employees. At the beginning of June, Fronius already had to lay off 350 people, and now another 650 are being added: 450 of them at locations in Austria, 200 in Germany and the Czech Republic. At the same time, Fronius is cutting back on capital investments and material expenditure. This is because photovoltaic systems are not selling as well as expected and there are no signs of a recovery in the market.
Talks about a social plan are underway, as reported by ORF Upper Austria. Not long ago, Fronius was unable to produce enough inverters. First there were difficulties in the supply chain, then Russia's invasion of Ukraine caused energy prices to rise sharply, making solar systems more attractive. In 2022 and 2023, Fronius invested around 420 million euros in additional production facilities in Sattledt in Upper Austria and Krumlov in the Czech Republic. The company also hired an additional 2,000 employees on top of the 6,000 it had at the time. Of these, 1,000 now have to look for work elsewhere. A further 100 employees who were working for Fronius on behalf of third-party companies (temporary workers) were returned to them some time ago.
The forecast of a sustained solar boom has not been fulfilled. Not only are the warehouses of wholesalers and solar system installers full, but the number of companies installing solar systems is also falling. In Austria, the number of insolvencies in this area is significantly higher than in the previous year, and various solvent companies have given up this business activity and are once again devoting themselves to other things. Chinese manufacturers, "who have flooded the European market with products, some of which are below production cost", also darken Fronius' forecast. They have apparently used the earlier delivery difficulties of European suppliers to conclude long-term contracts.
Other areas stable
Fronius will reduce the short-time working introduced for 1,300 employees at the end of last year in September. With the smaller workforce, this will probably no longer be necessary, and production will then be reduced from three to two shifts. The management of the solar division has already been replaced. As with the first wave of redundancies, Fronius boss Elisabeth Engelbrechtsmüller-Strauß believes that the current reduction in the workforce is sufficient – but according to media reports, she is no longer quite so sure this time. After all, this depends on the further development of the business.
Fronius was founded in 1945 and is headquartered in Pettenbach, Upper Austria. The company recently generated almost two thirds of its turnover with solar technology and a good third with welding technology. There is also a small division that manufactures charging technology for traction batteries and starter batteries. This year, the solar technology division is likely to shrink so much that it will fall back to around the same level of turnover as welding technology. Overall, Group turnover is likely to fall in the double-digit range. Nevertheless, welding and charging technology are "on track" according to Engelbrechtsmüller-Strauß. Fronius is represented by 38 subsidiaries on five continents; the German branch is located in Neuhof-Dorfborn in eastern Hesse.
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