China, the world’s largest solar manufacturer, will reduce its staff by one-third. Solar energy was formerly thought to be one of the most obvious indicators that the world was moving in the direction of a more sustainable and greener future. This was especially true in China, which is home to some of the world’s largest solar enterprises. Solar panel manufacturers used to be a representation of employment, creativity, and the promise of greener energy, with their massive factories and busy offices. However, that promising outlook turned sour for many individuals who unexpectedly lost their jobs.
China let go of one-third of their workforces last year
China’s biggest solar firms shed nearly one-third of their workforces last year, company filings show, as one of the industries hand-picked by Beijing to drive economic growth grapples with falling prices and steep losses. The job cuts illustrate the pain from the vicious price wars being fought across Chinese industries, including solar and electric vehicles, as they grapple with overcapacity and tepid demand.
The world produces twice as many solar panels each year as it uses, with most of them manufactured in China. Longi Green Energy 601012.SS, Trina Solar 688599.SH, Jinko Solar 688223.SS, JA Solar 002459.SZ, and Tongwei 600438.SS, collectively shed some 87,000 staff, or 31% of their workforces on average, last year, according to a Reuters review of employment figures in public filings.
The industry has just gotten worse by the year from 2023 to 2025
Analysts say the previously unreported job losses were likely a mix of layoffs and attrition due to cuts to pay and hours as companies sought to stem losses. Layoffs are politically sensitive in China, where Beijing views employment as key to social stability. Other than a 5% cut acknowledged by Longi last year, none of the firms mentioned above have announced any job cuts or responded to questions from Reuters.
Cheng Wang, an analyst at Morningstar, said,
“The industry has been facing a downturn since the end of 2023. In 2024, it actually got worse. In 2025, it looks like it’s getting even worse.”
Since 2024, more than 40 solar firms have delisted, gone bankrupt or been acquired, according to a presentation by the photovoltaic industry association in July. China’s solar manufacturers built new factories at a fever pitch between 2020 and 2023 as the state redirected resources from the sinking property sector to what it used to call the “new three” growth industries: solar panels, electric cars and batteries.
The problem of overcapacity: Too much growth can be harmful
Jefferies analyst Alan Lau said,
“There’s a lot of overcapacity in China, like steel, like cement, but you don’t see any industry in the past having industry-wide cash loss for one and a half years already.”
The difficulties facing the solar business demonstrate how too much growth, too rapidly, may backfire, despite the fact that it may seem odd for an industry founded on clean energy and climate promises to face difficulties. China’s sectors are not new to overcapacity, which occurs when a corporation produces more goods than the market requires. Perhaps that is why China pledges economic aid and targets unfair competition.
There is intense rivalry in solar. Companies quickly increased production in order to keep ahead, frequently constructing massive facilities and employing thousands of people. However, they were left with stacks of unsold panels and hefty operational expenses when markets shifted or demand dropped. While analysts say it is unclear whether job cuts continued this year, Beijing is increasingly signalling it intends to intervene to cut capacity, sending polysilicon prices soaring nearly 70% in July. If solar is not working out, then China can balance a rollout of assisted-driving tech instead.
GCN.com/Reuters.