Analysis: Bloom Energy thins the herd in California

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Boom fuel cells at the Red Lion site in New Castle County.
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(Photo  of Bloom Newark site)

Bloom Energy is trimming the size of its California staff, although the fuel cell maker appears to be hiring in Delaware.

The company based in San Jose, CA indicated in California filings in the past couple of months that is is laying off 119 workers in all areas of the company. 

In addition to its headquarters, Bloom operates a new $200 million manufacturing site in Fremont, also in northern California. The plant opened in mid-2022 at and makes core components that are shipped to the Newark site at the University of Delaware STAR campus for final assembly.

Bloom did not respond to requests for comment on the job cuts or their possible impact on Delaware operations.

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Employment rose in recent years

Between 2021 and 2022, Bloom employment rose sharply from about 1,700 to 2,500. The company has never been profitable, although Bloom says it has been able to cut the cost and increase the efficiency of the fuel cells that are typically powered by natural gas but can also use hydrogen and landfill sources.

Bloom shares have been trading in the $10 dollar range, after a roller coaster ride that saw the stock price rise over $30 a share in 2021 and the $3 range in 2019.

Bloom recently marked the 10th anniversary of the Newark site and noted that it now employs nearly 800 in Delaware. That number approaches orignal predictions a decade ago.  Instead, Bloom’s job growth in Delaware came at a much slower pace, although projected pay scales were higher than forecast.

A lingering issue is a 25-year agreement approved by the Delaware General Assembly that allowed electricity from Bloom fuel cells to be fed into the Delmarva Power grid at locations near Newark and New Castle at higher-than-market prices. Since wholesale electricity prices did not rise as forecast, Delmarva ratepayers are paying a few dollars a month more on their bills than if power had been acquired on the open market.

The power agreement

The legislative agreement engineered by  the administration of former Gov. Jack Markell, came after the state was looking to add blue-collar jobs after the closing of both of Delaware’s auto plants.

Critics claim the dded payout will total $700 million by the time the contract with Bloom expires. For its part, Bloom has stated that the company has already had a $300 million impact on the state’s economy.

The California layoffs come after a wave of downsizings in the Bay Area’s tech industry, with tens of thousands of job cuts in the past year.

While Bloom has a handful of openings in California, job postings indicate that the company is looking to fill a dozen or more positions in Delaware 

It is worth noting that California has stiffer regulations on layoff notices that go beyond federal WARN reqirements with as little as one position listed. Such was the case with Bloom’s filings. 

Delaware filings are generally limited to plant closings. Banks and other large employers in Delaware can typically cut staff without the requirement of a federal WARN notice that gives 60-days notice to the affected workers.

The largest Delaware layoff came in 2023 when health care company Centurion lost the state prison contract with 572 positions affected. However, many if not most of those individuals will be rehired by the new operator. – Doug Rainey

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