In April, Sinovel refused to accept and pay for contracted shipments of wind-turbine components.
AMSC said the components were for Sinovel’s 1.5MW and 3MW turbines.
AMSC said the decision was taken as a result of reductions in the company’s revenue expectations. The company expects a net loss of $10 million for the three months ending 30 June.
Last month, AMSC announced it intended to restate revenue for the fiscal quarters ending 30 September 2010 and 31 December 2010, estimating that the former would be revised down from $101.5 million to about $98 million and the latter from $114.2 million to $43 million.
The company said it was eliminating 150 positions across the business. It is also looking to reduce its costs by $30 million.
AMSC president and chief executive officer Daniel McGahn said: "These workforce reductions are necessary to maintain the health of the business in the wake of our business and contractual issues with Sinovel.
"Expenses have been reduced in virtually all departments, levels and major geographies, but we have focused on limiting the impact on customer-facing and research and development functions, which are integral to our growth and diversification initiatives."
In June, AMSC announced the retirement of chief executive and founder Gregory Yurek this month. He will be replaced by McGahn.