In an effort to save money, Nikola Corp. is cutting off 270 workers, or about 23% of its workforce, and limiting its efforts with electric trucks to North America.
Friday, the company announced that 150 employees who were supporting the company’s European programs would be laid off. Another 120 people who work at the Phoenix and Coolidge, Arizona, locations of the company will also lose their jobs. Around 900 workers will remain.
According to Nikola, the reductions are anticipated to result in an annual reduction of over $50 million in cash expenditures related to personnel. By 2024, the company’s annual cash expenditure is expected to fall below $400 million as a result of the cuts.
Shares fell 15% Friday, however rose around 1.7% in secondary selling exchanging following the declaration.
In a statement, CEO Michael Lohscheller stated, “Nikola has initiated a more focused business plan this quarter, focusing on North America, zero-emission truck production, and our HYLA hydrogen business.” The hydrogen fuel cell electric truck will go into production in a matter of weeks, and our battery-electric truck is currently on the market and performing well for our customers. We are proactively overseeing expenses and decreasing costs. In order to effectively carry out our goals, we are streamlining our operations, including our organizational structure.
Since Trevor Milton, the company’s founder and CEO, was indicted for federal securities fraud, the leadership at Nikola has been attempting to turn the business around. It has made some progress, like hiring a new CEO and getting ready for commercial production, but it has also hit a lot of roadblocks along the way.
In May, Nikola said it got a delisting notice from the public trade on the grounds that its portion cost has been beneath $1 for the beyond 30 days. The organization has until November 20 to conform to Nasdaq’s base cost rule, which requires the offer cost to be above $1 for 10 continuous work days.
In 2020, when Milton was in charge of the buzzy SPAC, Nikola shares reached $65.90. Since then, shares have dropped to $1.19.
The business has also been trying to get more shares issued, but not enough investors have voted in favor of the proposal. In an effort to obtain the necessary number of votes to add shares to the market, Nikola postponed its annual shareholder meeting until July 6. Nikola necessities to get over half of all remarkable offers to cast a ballot for the proposition, which is a higher bar than different recommendations would have to reach. Without the endorsement of this proposition, creation could be deferred or rejected, the organization said in a proclamation.