LONGi cut 42,000 jobs in two years, the entire photovoltaic industry reduced its workforce by 220,000, and the trillion-yuan loss clearance has just begun.
Foresee Energy learned that according to statistics on annual reports of listed companies from multiple institutions including Black Hawk PV, LONGi Green Energy cut 42,000 employees in two years, with the total number of employees plummeting from 75,000 at the end of 2023 to 32,800 at the end of 2025, a drop of 56.3%.
However, the momentum of loss reduction did not continue into 2026. In the first half of the year, the revenue reached 27.045 billion yuan, down 17.58% year on year, and the net loss attributable to shareholders was 3.684 billion yuan, with the loss expanding by 43.3% year on year.
At the same time, the entire photovoltaic industry cut 220,000 jobs in two years, and more than 150 enterprises went bankrupt and liquidated. Layoffs, production restriction, mergers and acquisitions, and bankruptcy are advancing simultaneously, and the photovoltaic industry has shifted from an expansion race to a survival race.
The real problem is not whether LONGi can return to its peak, but who can still stay at the table when production capacity is twice the demand and the price war has lasted for three years. Overcapacity is not a cyclical problem, but a problem of development model. The growth logic supported by investment in capacity expansion, local supporting facilities and capital transfusion is being replaced by industrial clearance.
The management of LONGi packaged the large-scale layoffs as “active strategic production restriction”.
In 2024, the capacity utilization rates of LONGi’s two core product lines, silicon wafers and modules, both fell below 65%, which means that more than one third of the production lines were idling, and there was no way to retain employees when the machines were not running. The deeper problem lies in product iteration. Zhong Baoshen, the chairman, admitted in his letter to shareholders that there was a serious disconnection between R&D, production and marketing for HPBC 1.0, leading to a sharp rise in inventory and huge inventory impairment losses. If there is a rhythm mismatch in the process from R&D to mass production and then to market recognition for a new technology product, the cost is the evaporation of real money on the inventory account.
For the whole year of 2025, the current increase in LONGi’s accrued termination benefits was 92.9184 million yuan, but the actual payment was 151 million yuan, and the intermediate gap came from the 87.2946 million yuan of layoff liabilities recorded in the accounts at the end of 2024.
But this does not mean that LONGi is having an easy time. The number of technical personnel decreased by 673, a decrease of about 6.9%, which seems not large, but the proportion of R&D personnel in the total number of the company has dropped to 9.45%. For a photovoltaic enterprise that relies on technology for development, the proportion of R&D personnel has fallen below 10%. The 12GW cell project in Tongchuan and the 12.5GW BC cell project in Xixian New Area are still under construction, and the first phase of production capacity was put into operation successively in 2025. Laying off employees while expanding production, this contradiction precisely shows that the enterprise is forcing a transformation through the way of “blood exchange”.
Layoffs are not LONGi’s choice, but an ultimatum of the whole industry. According to statistics from Black Hawk PV, from the end of 2023 to the end of 2025, 139 photovoltaic enterprises cut 220,414 jobs in total. In the first half of 2025, 5,089 photovoltaic-related enterprises were deregistered across the country, up 8.3% year on year. Since 2025, more than 50 photovoltaic enterprises have filed for bankruptcy or liquidation, and the number has exceeded 150 since 2024. Once “star” enterprises such as Suntech Power have left the market one after another.
The name Suntech Power was a global photovoltaic benchmark more than a decade ago, but now it is just a line on the bankruptcy list.
In the first quarter of 2026, the total revenue of 22 enterprises in the main photovoltaic industrial chain reached 95.856 billion yuan, down more than 11% year on year, the total net loss attributable to shareholders was 10.554 billion yuan, and the loss after deducting non-recurring gains and losses was 13.172 billion yuan. Leading enterprises such as Tongwei Co., Ltd., LONGi Green Energy and TCL Zhonghuan have recorded net losses for 10 consecutive quarters. Ten quarters means two and a half years, which means that since the second half of 2023, these best enterprises in the industry have been losing money all the time.
The price of polysilicon fell by more than 8%, the price of silicon wafers fell by more than 36%, the price of cells fell by more than 16%, and the price of modules fell by nearly 19%. The module price once fell below 0.6 yuan/W, and the whole industrial chain generally suffered losses. In 2024, the total net loss of A-share photovoltaic enterprises exceeded 55 billion yuan. Huang Yiping, professor of the National School of Development at Peking University, pointed out that the most fundamental reason for the chronic overcapacity in China is the economic imbalance at the macro level, that is, more investment and less consumption, and local governments concentrate resources on these industries, which eventually leads to a sharp surge in production capacity in the short term. The photovoltaic industry is the most typical example on this logical chain.
The price war is not competition, but collective suicide. The one who stops first dies first, but if no one stops, everyone dies together. The end of low-price competition is the continuous retreat of the quality bottom line. The energy storage industry is repeating the same plot of the photovoltaic industry. In 2026, the planned expansion scale of energy storage cells has exceeded 800GWh, the completed production capacity by the end of the year is about 1.2 to 1.5TWh, and the total planned production capacity has exceeded 2TWh, which is far higher than the real demand of the global market. The key equipment of the energy storage system has seen a price drop of about 80% in the past three years, and some bid prices have long been lower than the average production cost of the industry.
Zhang Tianren, chairman of Tianneng Holding Group, pointed out that some enterprises bid at prices lower than cost, forming a vicious cycle of “dumping at low prices – declining profits – shrinking quality”. Some enterprises compromise in links such as cell quality control and safety redundancy to seize market share, which brings major safety risks to end applications.
Industry reshuffling is never average. While second and third tier enterprises are struggling on the profit and loss line, leading enterprises are acquiring high-quality assets. TCL Zhonghuan plans to acquire Yida New Energy, the world’s 8th largest module shipper, through capital increase and share expansion, with a transaction amount not exceeding 1.56 billion yuan. Tongwei Co., Ltd. continues to promote the acquisition of polysilicon enterprise Lihao Clean Energy. After planning to obtain controlling stake with no more than 5 billion yuan in October 2025, it announced the acquisition of part of the shares again in April 2026. From 2025 to 2026, the loss ratio of second and third tier photovoltaic enterprises is expected to reach 70%. Enterprises with weak technical competitiveness and poor cost control will bear the brunt in the face of overcapacity and price war.
The differentiation in the power battery industry is also extremely fierce. The capacity utilization rate of CATL in the first half of 2026 reached 95%, far higher than the 65% average of China’s industry. Morgan Stanley’s analysis believes that companies with higher utilization rates have greater chances to get approval for future battery capacity expansion projects, while enterprises with lower utilization rates may face stricter restrictions on new production capacity. The capacity utilization rate of leading enterprises’ power battery lines is roughly in the range of 85% to 97%, that of second-tier enterprises is about 40% to 65% on the whole, and that of third-tier and tail enterprises is often below 30%. In the second half of 2026, all regions have basically stopped accepting the filing of new power battery and energy storage battery production capacity. Policies have shifted from guidance to compulsion, which means that industry clearance has changed from a spontaneous market behavior to an administrative-driven one.
The profit margin of the new energy vehicle industry has been pushed to the limit by the price war. In the first quarter of 2026, the profit margin of the automobile industry was only 3.2%, far lower than the 6% average level of the manufacturing industry. From January to February 2026, the profit margin further dropped to 2.9%, a significant decline from 8% in 2017. At the beginning of 2026, nearly 70 models in the whole industry cut prices intensively, with the average price of new energy models reduced by 38,000 yuan, and the three-year-long price war further compressed the profit space of automakers. Data from the National Bureau of Statistics shows that while the revenue of the automobile manufacturing industry in the first quarter decreased slightly, the total profit fell by nearly 20% year on year. After three years of price war, the marginal stimulating effect of price reduction on sales has decreased significantly, but no one dares to stop first, and the one who stops first will be eliminated.
LONGi’s layoff of 42,000 employees is only a section of the new energy industry clearance. From photovoltaic to energy storage and then to new energy vehicles, the same plot is being staged repeatedly in different tracks: Capital inflow pushes up production capacity, overcapacity triggers price war, price war erodes profits, enterprises are forced to lay off employees and shrink after profits disappear, and only a few enterprises can survive after the contraction.
The balance of LONGi’s termination benefit liabilities has dropped to 29.1789 million yuan, and the peak of layoffs has indeed passed. But what has passed is not only the layoff cycle of one company, but also the development logic of the whole industry. When production capacity is no longer a scarce resource, and when price war is no longer a means of competition but a normal state of survival, the only question that those who stay at the table need to answer is: What on earth do you rely on to survive? This question was raised by the photovoltaic industry at the cost of cutting 220,000 jobs in two years. The energy storage and new energy vehicle industries are going through the same interrogation in a shorter time.
This article is from the WeChat official account “Foresee Energy”, authorized for release by 36Kr.
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