Item 2.05. Costs Associated with Exit or Disposal Activities.
On December 27, 2019, SunPower Corporation (the "Company") adopted a
restructuring plan to realign and optimize workforce requirements in light of
recent changes to its business, including the previously announced planned
spin-off of Maxeon Solar Technologies, Pte. Ltd. (the "Spin-Off"). In connection
with the restructuring plan, which includes actions implemented in the fourth
quarter of 2019 and is expected to be completed by mid-2023, the Company expects
between 145 and 160 non-manufacturing employees, representing approximately 3%
of the Company's global workforce, to exit the company over a period of
approximately 12 to 18 months. Between 65 and 70 of these employees in the
SunPower Technologies business unit and corporate have largely been informed and
are expected to exit the Company following the Spin-Off and completion of
transition services. As the SunPower Energy Services business unit hones its
focus on distributed generation, storage, and energy services, 80 to 90
employees exited or are expected to exit the Company during the fourth fiscal
quarter of 2019 and the first half of 2020. The Company expects to incur
restructuring charges totaling approximately $16 million to $22 million,
consisting primarily of severance benefits (between $8 million and $11 million)
and retention benefits (between $8 million and $11 million) primarily associated
with the retention of employees impacted by the spin-off transaction and certain
key research and development employees. A substantial portion of such charges
have been and are expected to be incurred in the fourth quarter of fiscal 2019
and the first quarter of fiscal 2020, and the Company expects between $14
million and $19 million of the charges to be cash. The actual timing and costs
of the plan may differ from the Company's current expectations and estimates.
Forward-Looking Statements
The above information contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, but not limited
to, statements regarding the Spin-Off and the Company's forecasts or projections
of the extent or timing of restructuring charges and related actions. These
forward-looking statements are based on the Company's current assumptions,
expectations, and beliefs and involve substantial risks and uncertainties that
may cause results, performance or achievement to materially differ from those
expressed or implied by these forward-looking statements. Factors that could
cause or contribute to such differences include but are not limited to: (1) the
timing and execution of restructuring plans; (2) employee management and
retention issues that may arise; and (3) estimates and assumptions related to
the cost of exiting employees and other associated costs. A detailed discussion
of these factors and other risks that affect the Company's business is included
in filings the Company makes with the Securities and Exchange Commission (the
"SEC") from time to time, including the Company's most recent reports on Form
10-K and Form 10-Q, particularly under the heading "Risk Factors." Copies of
these filings are available online from the SEC or on the SEC Filings section of
the Company's Investor Relations website at investors.sunpower.com. All
forward-looking statements in this Current Report on Form 8-K are based on
information currently available to the Company, and the Company assumes no
obligation to update these forward-looking statements in light of new
information or future events.
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