Electric vehicle startup Nikola Motor said on Friday it would lay off a total of 270 employees across its European and US operations.
The company motivated the layoffs by the need to cut costs and sharpen its focus on the North American market – it has already announced plans to sell its European joint venture share to Iveco Group. Of the 270 employees impacted by the decision, 150 were supporting Nikola's European operations and 120 were based at its Arizona sites in Phoenix and Coolidge.
Nikola said it is supporting those affected with transition assistance, but did not elaborate on what that means.
"Nikola conducted a thorough review of its organizational structure and made the difficult but strategic decision to reduce its headcount," the company said in a press release, adding that it's now "reorganizing workforce around new areas of focus and eliminating non-essential spend."
The truck maker noted that these decisions will help preserve 900 jobs and position the company for future growth by helping it cut personnel-related cash spend by $50 million annually. Furthermore, total annual cash usage expected to decrease to under $400 million by 2024.
Gallery: Nikola Tre BEV Euro version
Nikola also reiterated that the Q3 launch of the Tre FCEV Class 8 hydrogen fuel cell electric truck remains on schedule. The company says it currently has 178 sales orders from 14 end customers.
The announcement is the latest setback Nikola is facing after struggling in recent months with a Tre BEV delivery shortfall, executive turnover, and a slumping stock price that has led to a possible stock delisting.
Shares in Nikola fell 15 percent to close on June 16 at $1.19, getting close ot the minimum $1.00 closing bid price requirement.
According to the rules, if a company trades for 30 consecutive business days below that threshold, Nasdaq will send a deficiency notice to the company advising it that is has been afforded a "compliance period" of 180 calendar days to regain compliance with the applicable requirements. Nikola received such a notice in May 2023.
Ironically, Nikola founder Trevor Milton, who was convicted of securities fraud last year, criticized the company on social media saying it needed new leadership. He owns 50 million Nikola shares, about 9 percent of the company's shares outstanding.
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Source: Nikola via Reuters