450 of them in Germany

Fronius cuts a further 650 domestic jobs

The Upper Austrian company only made 350 employees redundant in June

(Bild: Harald Dostal)

Shock at technology group Fronius: after 350 employees were made redundant in June, 650 jobs are now being cut, 450 of them in Austria, as announced on Monday. The reason given for the move is that market estimates had to be drastically revised downwards.

After 350 employees in the solar division had to leave the Upper Austrian technology group Fronius, based in Pettenbach, in June, the Group is now cutting a further 450 jobs in Austria and 200 in subsidiaries in Germany and the Czech Republic. Those affected were informed on Monday. 

After major investments
Since coronavirus, business in the PV industry has been like a rollercoaster ride: not so long ago, supply chain problems and the PV boom meant that the family-owned company Fronius was unable to deliver as much as it had ordered. As a result, around 420 million euros were invested in the expansion of the production lines at the Sattledt and Krumau sites in 2022 and 2023 and 2,000 new employees were hired. The entire industry had assumed that the exponential growth rates would continue unabated in the coming years - but this did not happen, it was said. Demand had leveled off because wholesalers and installers had built up huge inventories in the wake of the semiconductor and energy crises. Fronius suspects that these stocks also include a lot of imported goods from China and that the competition from the Far East has taken advantage of the supply difficulties in Europe to conclude longer-term contracts.

Hopes not fulfilled
After the sales forecasts had already been revised downwards in the previous year, Fronius cut shifts at the end of 2023 and parted with leased workers; this year, 1,300 employees were sent to part-time work. However, the hope that the overcapacity would be reduced in the first half of 2024 was not fulfilled. In June, 350 employees had to leave and the management of the Solar Energy business unit was replaced. At the time, Managing Director Elisabeth Engelbrechtsmüller-Strauß assumed that no further job cuts would be necessary, but this assumption has now also had to be revised. After the world's largest solar trade fair Intersolar in Munich, it became apparent that growth this year was expected to be even lower than feared and that wholesalers would be supplied with inverters well into 2025.

(Bild: EPA)

All locations affected
As a result, there will now be further massive staff cuts. 450 employees are affected, spread across all locations in Austria - Wels, Steinhaus, Sattledt, Thalheim and Pettenbach. Talks about a social plan are underway. In addition, 200 jobs in subsidiaries abroad, mainly in Germany and the Czech Republic, will also be cut. In return, "internal short-time working" will end in September and the company will switch from a three-shift operation to a two-shift operation. In addition, savings will be made on investments - these would have mainly affected buildings and equipment - and material expenses.

Decline instead of growth
Engelbrechtsmüller-Strauß explains the fact that the market development in the industry was not seen coming with a variety of developments - after a PV hype due to the Green Deal, the Ukraine war and the energy crisis, energy prices and fears about the gas supply have fallen again, while the framework conditions for investments have deteriorated in return. Instead of the expected double-digit percentage growth, the market for the small private systems relevant to Fronius has "declined by 25 percent in Austria and 43 percent in Germany". This is also further delaying the reduction of full warehouses.

(Bild: Wenzel Markus)

Still increased number of employees
Fronius' workforce has grown from around 6,000 to around 8,000 in the past two to three years. The two waves of layoffs in 2024 will now bring the total to around 7,000. "Despite the current staff cuts, we currently employ more than 1,000 additional employees," says Engelbrechtsmüller-Strauß, "which is no consolation for those affected, but it helps them to put things in perspective." This time, however, she remains more cautious about stating that the job cuts are now over. "Based on the assumptions that we have now", she thinks so, but it is not possible to predict geopolitical developments.

Double-digit decline expected
Nevertheless, the Fronius boss looks to the future with a certain optimism because "we have been able to increase market shares in important markets such as Austria and Germany and have been able to maintain market shares in Switzerland and Australia, for example". Nevertheless - after a turnover of around 1.6 billion euros in 2023 (2022: 1.2 billion euros), she expects a double-digit percentage decline this year, which will be attributable to Solar Energy.

Solar energy the problem child 
Fronius' business is based on three very different pillars: welding technology, solar technology and battery charging systems. Welding technology and battery charging systems are very stable and "on track" - in contrast to Solar Energy. The solar sector has recently grown strongly and already accounted for around 60 percent, welding technology 35 percent and battery charging systems around 5 percent. Welding technology and solar are now roughly the same size again, as they were in the years before the PV boom.