Panasonic Corp. will begin to wind down U.S.production of photovoltaic cells and modules at Gigafactory New York in Buffalo, NY.

By the end of May 2020, Panasonic said it would will cease U.S. solar manufacturing operations and is scheduled to exit the facility by the end of September 2020.

Panasonic says it is supporting Tesla in its efforts to identify and hire qualified applicants from Panasonic’s impacted workforce. Tesla plans to hire qualified applicants to new positions needed to support its solar and energy manufacturing operations in Buffalo.

Panasonic’s decision is part of the company’s broader streamlining of its global solar operations. According to Tesla, this does not impact Tesla’s future solar growth business plans. Optimizing the development and production capability of its photovoltaic business, Panasonic will integrate solar into its energy solutions business.

"This decision will have no impact on Panasonic and Tesla’s strong partnership in Nevada. The two companies will continue their industry-leading electric vehicle battery work taking place at Tesla’s Gigafactory outside of Reno, NV," Panasonic said.

Panasonic will also continue to sell Panasonic brand solar panels to U.S. customers through its own distribution network.

Empire State Development Chair Howard Zemsky announced that Tesla said it will exceed its next employment benchmark at Buffalo RiverBend Facility.

“Tesla informed us that they have not only met, but exceeded their next hiring commitment in Buffalo. As of today, Tesla said they have more than 1,500 jobs in Buffalo and more than 300 others across New York State. ESD will perform the necessary due diligence to verify the company’s data.

“This count does not include the Panasonic positions and — while their operations were co-located at RiverBend — there was no incentive package between the state and Panasonic. We understand that Panasonic has made a corporate decision to move away from global solar products, but this action has no bearing on Tesla’s current operations nor its commitment to Buffalo and New York State, according to Tesla.

“While the New York State Department of Labor stands ready with its Rapid Response Team to ensure that any employees who are impacted by Panasonic’s decision are connected to opportunities and resources available in the region, Tesla has indicated that it intends to hire as many Panasonic employees as it can going forward.

“We look forward to continuing to grow employment at the RiverBend site with Tesla.”

The move increases uncertainty over Tesla’s solar business which is already under scrutiny, having been drastically scaled back since the U.S. firm bought it for $2.6 billion in 2016.

The withdrawal comes as Panasonic scrambles to divest of unprofitable businesses as its strategic shift to components from consumer electronics struggles to drive profit growth.

Tesla is set to diversify its battery supplies to include South Korea’s LG Chem Ltd and China’s Contemporary Amperex Technology Ltd (CATL).