FuelCell Energy announces employee layoffs
FuelCell Energy laid off 135 employees on Friday, with the company stating it will save $11.5 million annually as a result.
FuelCell disclosed the job cuts Monday in a filing with the U.S. Securities & Exchange Commission, stating the action follows completion of a new power plant on Triangle Street in Danbury that aligns fuel cells differently to increase the efficiency of the hydrogen used for their fuel.
FuelCell also announced the retirement of Anthony Rauseo as chief operating officer, who held the role since 2010 and received
$830,000 in compensation last year.
Under CEO Chip Bottone, FuelCell has its main factory in Torrington where it produces fuel cells that generate electricity through a chemical process. The job cuts were split largely between Danbury and Torrington, according to Tom Gelston, head of investor relations, with the company having 420 employees between the two locations as of March and 60 elsewhere.
“We don’t undertake these actions lightly, and we remain focused on executing in the near-term on the (80-plus) megawatts in backlog of projects we have already won,” Gelston stated in an email response to a Hearst Connecticut query on Monday. “These actions should not impact our commercial ability to deliver on these projects.”
Torrington Mayor Elinor Carbone said she got a phone call Friday telling her about the layoffs, adding “They said it was financial circumstances.
“There are so many talented Torrington residents,” she said.
Carbone said in a later email that she was “very disappointed to learn of the layoffs here in Torrington and Danbury. Fuel Cell recently reached out to my office to invite us to celebrate their 50th anniversary and less than 2 weeks later, they called to inform me of the reductions being made to their workforce. I sincerely hope this is a temporary measure that will afford them to restructure and rebuild.”
In January, FuelCell reworked the terms of a $10 million loan first issued in 2015 by the state, with the company required to have a Connecticut workforce numbering nearly 540 people by 2022. FuelCell would receive a $2 million loan “forgiveness” credit if it does so.
If it falls short, it would be required to pay $18,600 for each promised job it failed to maintain for a period of two years. Gelston did not state immediately whether FuelCell has sought any new adjustment to the terms of the deal.
FuelCell reported a $33 million loss in the first quarter of its fiscal year covering November through January — the largest it ever reported for a single, three-month period — with revenue down by more than half to $17.8 million.
After a $62 million loss in its 2018 fiscal year, FuelCell has gone 20 years now without a profit. The company’s assets totaled $346 million entering February, including $27.7 million in cash unrestricted by any contractual requirements.
Contributing to FuelCell’s recent losses have been dividends it has paid out to investors for preferred stock as a means to raise cash to fund operations, with FuelCell’s common stock trading at 27 cents a share Monday. The company faces a late May deadline to lift the price above $1 or see its stock delisted from the Nasdaq exchange on which its shares trade.
FuelCell reported having a record, $1.3 billion backlog as of January, with orders for power plants in Connecticut and New York taking up some of the slack from declining business in South Korea. The company is now in a legal dispute with a power company there that had long been its largest customer.
“We’ve seen both utility companies in the state — Avangrid and Eversource — recognize the benefits of our projects,” Bottone said last month during a conference call with investors. “The same dynamics that took shape in South Korea and in Connecticut are now playing out in New York. The (Long Island Power Authority) projects ... (put) plants right where the power is needed, and again giving us a leadership position.”
The company recently completed a design for a solid-oxide fuel cell that generates less than a megawatt of electricity, with its mainstay carbonate fuel cell technology having larger capacity.
JoAnn Ryan, president and CEO of the Northwest Connecticut Chamber of Commerce, said the organization has “the resources to help the employees who have been laid off.”
“We have a rapid response team ready. There a number of jobs in the area. I know of one company (in the area) that’s adding a second shift,” she said.
Ryan said she heard it was an entire shift of workers at FuelCell who were laid off.
She said the chamber would work with the state Department of Labor “to make sure we can help. It’s not easy for either the employees or the employers.”
Asked about the impact of the layoffs, she said that “a lot of people didn’t sleep well over the weekend.”