Plug Power to cut 117 jobs, move all remaining employees to Latham
LATHAM Plug Power Inc. announced Thursday that it will consolidate all operations to its Latham headquarters.
Company officials say the restructuring will result in a work force reduction of 117 employees at its facilities in the United States, Canada and India.
Vice President of Marketing and Investor Relations Reid Hislop said about a dozen employees in Latham will be affected, and they were notified Thursday. Hislop said they expect three or four of their employees in Vancouver to transfer to Latham as part of the consolidation.
In a prepared statement, Plug Power officials say the move is being made to optimize efficiency and growth potential in the $4 billion material handling market in North America.
They expect the consolidation to save $12 million to $15 million annually, which will be used for market capital.
“Making a profit is our first priority. As a fuel cell company, we have to make some tough decisions to get there,” Hislop said. “We have traction in the material handling market, and we’re doubling down on that.”
At the same time, Plug Power will put its Gensys cellphone tower generator business “on the back burner,” according to Hislop. “It’s just too expensive to operate and this is in the best interests of our shareholders.”
He said the company was trying to break into India’s growing cellphone market, but most cellphone towers are powered by diesel generators, which are “heavily subsidized” by the Indian government. “We were attaching dollars to every shipment, and we just can’t do it anymore.”
The company manufactures hydrogen fuel cells for homes and businesses, including GenDrive batteries for forklifts. CEO Andy Marsh said: “With our experience we’ve seen a much faster adoption of fuel cell power in the material handling space, and as a result, we are focusing resources to accelerate customer acquisition in this important market. This is the right move for the material handling business and the right move for Plug Power.”
The company expects to deliver 1,100 GenDrive units this year.
Marsh added: “Interest from commercial partners is high as we continue to explore opportunities to capitalize the strength of this business.”
GenDrive customers include Rochester-based Wegmans, Sysco, United Natural Foods, and Central Grocers.
Wall Street reacted positively to the move. Plug Power shares were 40 cents per share at the close of trading Thursday, after starting the day at 36 cents per share, an 11 percent increase.
One year ago, the company was valued at 90 cents per share. Five years ago, the value was $6.31 per share.