SolarCity obtained permission to lower the number of people it promised to employ at its $900 million solar panel factory in Buffalo in October. However, despite the reports, SolarCity and officials with SUNY Polytechnic Institute claim these job reductions do not reflect a setback for the project. SUNY Polytechnic Institute is spearheading the construction of the 1.2 million-square-foot facility.

SolarCity Corp Buffalo Project: Job Targets, State Funding Reduced

Automation to blame

SolarCity was required to hire at least 1,460 workers for the factory, according to the original agreement with the state, but later the number was dropped to just 500 workers based on the amended agreement signed in October and filed with the U.S. Securities and Exchange Commission. SolarCity was supposed to hire 900 within the first 24 months of operation, as per the earlier contract.

In recent months, SolarCity’s project has experienced cash flow issues, and the U.S. Attorney for the Southern District, Preet Bharara, might begin a federal probe with the project at focus. However, officials at SolarCity say the changes reflect the rapidly evolving state of semiconductor manufacturing: a move towards less reliance on human workers for production.

SolarCity spokeswoman Kady Cooper told the Times Union on Monday, “With new advanced semiconductor manufacturing equipment that enables automation, we believe that 500 is the minimum number of manufacturing jobs the factory will require.”

How does SolarCity plan to compensate for cuts?

Cooper added that the company will augment those manufacturing jobs with head count in project development, related sales and other functions. The region allows them to create a wider range of jobs appropriate for a broader range of potential applicants, and this will be in the betterment of the region, she said.

SolarCity is the largest solar panel installer in the country, but it has never made solar panels of its own. The Buffalo factory will be the largest ever built in the U.S. The solar company was required to hire 2,000 more workers (in addition to the 1,460 factory workers) statewide for its installation business and 1,440 contractors and suppliers to make up the 4,900 jobs.

But as per the new agreement, SolarCity is required to hire a total of 5,000 workers in the state, including the 500 factory workers. SUNY Poly spokesman Jerry Gretzinger said the reduction of factory jobs will lead to the creation of more management and research and development jobs.

Also the October agreement says that now SolarCity must pay $52 million of the $400 million that the state is spending on manufacturing equipment for the factory.