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Updated: November 15, 2024

Danbury-based FuelCell Energy cuts 17% of workforce, including CT positions

Contributed Danbury-based FuelCell Energy's new 14-megawatt fuel cell park in Derby.

FuelCell Energy Inc., a Danbury-based fuel cell company that has been struggling financially, announced early Friday that it reduced its workforce by 17%.

Over two rounds of layoffs, one in September, and a larger one on Thursday, the company trimmed jobs across its locations in the United States, Canada and Germany. 

On Thursday, FuelCell shed about 90 positions, company officials said. FuelCell employed about 600 people in 2023, according to its annual report.

The officials confirmed that jobs based in Connecticut were eliminated, but did not say how many.

However, the cutbacks did not affect FuelCell’s manufacturing facility in Torrington, where its carbonate fuel cell modules – which convert fuel into hydrogen – are produced.

The restructuring is part of an effort to reduce the company’s operating costs by 15% in fiscal year 2025, which includes reducing spending on product development and overhead, FuelCell said in the announcement.

The company noted “slower-than-expected investments in clean energy.”

FuelCell officials said they plan to focus on “near-term success” and will realign resources with core technologies. The plan involves expanding its molten carbonate technology to meet rising demand for data-center power, thanks to the proliferation of AI technology.

The layoffs come as the publicly traded company, founded in 1969, takes aggressive moves to improve its financial stability.

FuelCell implemented a one-for-30 reverse stock split on Nov. 8, which gave stockholders one share for every 30 they owned, though the value of their holdings remained unchanged.

The company’s stock had been trading at less than $1. Under Nasdaq listing requirements, FuelCell had until the end of November to boost its stock price above the $1 minimum requirement.

At Thursday’s close, FuelCell shares were trading at $7.01, up 17.6%.

Shareholders approved the reverse stock split on Oct. 31, but some investors complained that the maneuver would cause stockholder dilution and blamed leadership for the company’s poor performance.

In September, FuelCell reported a net loss of $35.1 million during its third-quarter, up from $23.6 million in 2023. Also, its revenue fell 7% to $23.7 million in the third quarter.

The company's stock has performed poorly, falling 85.4% since the beginning of the year.

FuelCell has seen glimmers of hope, however, including a 22% jump in generation revenue in the third-quarter, which was driven partly by its new 14-megawatt fuel park in Derby.

Also, the company recently secured debt financing to upgrade fuel cells at Gyeonggi Green Energy in South Korea, the largest fuel cell park in the world.

Moving forward, FuelCell said its strategy “will emphasize topline revenue growth and future profitability.”

“We have always known that the energy transition would not be linear, and we have built a portfolio of products and applications that allow FuelCell Energy to pivot when necessary," President and CEO Jason Few said. "The steps announced today enable us to navigate the current market while maintaining the flexibility to capture tailwinds.” 

The company's financial difficulties are occurring amid broad industry challenges, including uncertainty about government policies concerning clean energy.

In September, Ballard Power Systems, a similar fuel cell company based in Vancouver, Canada, announced a global restructuring, which it attributed to a slowdown in hydrogen infrastructure development and delayed fuel cell adoption.

FuelCell said its restructuring will not impact existing customers, and emphasized that it will continue to deliver replacement fuel cell modules and perform service and monitoring under its contracts.

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