China’s Solar Industry Faces Deep Layoffs Amid Overcapacity and Price Wars

China’s largest solar panel manufacturers cut nearly one-third of their workforce in 2024, shedding about 87,000 jobs, as the sector struggles with falling prices, overcapacity, and mounting losses. Longi Green Energy, Trina Solar, Jinko Solar, JA Solar, and Tongwei saw an average 31% drop in headcount, according to public filings. Analysts say the cuts stem from layoffs, reduced hours, and pay cuts as firms battle a global glut—China produces twice as many solar panels annually as the world consumes.

The downturn, which began in late 2023, worsened through 2024 and 2025. Over 40 solar companies have gone bankrupt, delisted, or been acquired since last year. Aggressive expansion between 2020 and 2023, fueled by Beijing’s push to grow the “new three” industries—solar, electric vehicles, and batteries—has led to a brutal price war. U.S. tariffs on Chinese-owned factories in Southeast Asia have further pressured margins, with the industry losing an estimated $60 billion in 2024.

Beijing is signaling intervention, pushing for capacity cuts to stabilize prices. Polysilicon prices surged nearly 70% in July after top producers discussed forming an OPEC-like alliance and creating a 50 billion yuan fund to close low-quality facilities. President Xi Jinping has called for an end to “disorderly price competition,” while the industry ministry pledged to retire outdated production capacity.

However, local governments remain hesitant to act due to concerns over job losses and economic growth. Analysts estimate that 20-30% of manufacturing capacity must be eliminated for profitability to return. Despite directives to halt expansion, new projects continue, highlighting the challenge of reining in one of China’s most important but troubled clean energy industries.