BUSINESS AND ECONOMY COMMENTARY
Another EV Company Has To Make Huge Layoffs In Desperate Bid To Stay Afloat
By Ellis RobinsonJune 4, 2024
Electric vehicle company Fisker was recently forced to fire hundreds of employees amid challenging financial circumstances. Reportedly, the automaker is seeking funding or a buyout to stay afloat. Otherwise, the company might be forced to file bankruptcy.
As Fisker’s financial predicament jeopardizes the company’s solvency, it had to resort to mass layoffs, cutting hundreds of headcount. Founder and CEO Henrik Fisker told investors that a large investor to which the company is indebted, as well as the chief restructuring officer representing the investor, requested that Fisker fire more employees.
According to those familiar with the matter, only 150 people remain at the company after the round of layoffs. Earlier this year, Fisker already cut 15 percent of its staff, and as of mid-April, the company employed approximately 1,135 people. However, Fisker indicated that the laid-off workers would be rehired once the company is in a better position.
The American Tribune has continually reported on troubling news in the EV industry. Many producers are facing headwinds amid a pullback in consumer interest. EV maker Lucid recently announced large-scale layoffs in a cost-cutting campaign.
According to an 8-K filing with the Securities Exchange Commission last month, Lucid announced it would be firing 6 percent of its total workforce, or about 400 employees, by the third quarter of this year. The reduction in headcount would reportedly impact both management and the workforce.
Per the filing, “On May 24, 2024, Lucid Group, Inc. (the “Company”) announced a restructuring plan (the “Plan”) intended to optimize the Company’s operating expenses in response to evolving business needs and productivity improvements through a reduction of the Company’s current employee workforce by approximately 400 employees, or approximately 6%. The Company expects to substantially complete the Plan by the end of the third quarter of 2024, subject to local law and consultation requirements.”
Luxury German automaker Mercedez-Benz was also forced to reevaluate its EV strategy to better align with consumer preferences. The company had previously set an ambitious goal to be all-electric by 2030. However, CEO Ola Källenius recently informed investors that the transition would take much longer than initially anticipated.
“Customers and market conditions will set the pace of the transformation,” the company stated. “The company plans to be in a position to cater to different customer needs, whether it’s an all-electric drivetrain or an electrified combustion engine, until well into the 2030s.”
BUSINESS AND ECONOMY COMMENTARY
Another EV Company Has To Make Huge Layoffs In Desperate Bid To Stay Afloat
By Ellis RobinsonJune 4, 2024
Electric vehicle company Fisker was recently forced to fire hundreds of employees amid challenging financial circumstances. Reportedly, the automaker is seeking funding or a buyout to stay afloat. Otherwise, the company might be forced to file bankruptcy.
As Fisker’s financial predicament jeopardizes the company’s solvency, it had to resort to mass layoffs, cutting hundreds of headcount. Founder and CEO Henrik Fisker told investors that a large investor to which the company is indebted, as well as the chief restructuring officer representing the investor, requested that Fisker fire more employees.
According to those familiar with the matter, only 150 people remain at the company after the round of layoffs. Earlier this year, Fisker already cut 15 percent of its staff, and as of mid-April, the company employed approximately 1,135 people. However, Fisker indicated that the laid-off workers would be rehired once the company is in a better position.
The American Tribune has continually reported on troubling news in the EV industry. Many producers are facing headwinds amid a pullback in consumer interest. EV maker Lucid recently announced large-scale layoffs in a cost-cutting campaign.
According to an 8-K filing with the Securities Exchange Commission last month, Lucid announced it would be firing 6 percent of its total workforce, or about 400 employees, by the third quarter of this year. The reduction in headcount would reportedly impact both management and the workforce.
Per the filing, “On May 24, 2024, Lucid Group, Inc. (the “Company”) announced a restructuring plan (the “Plan”) intended to optimize the Company’s operating expenses in response to evolving business needs and productivity improvements through a reduction of the Company’s current employee workforce by approximately 400 employees, or approximately 6%. The Company expects to substantially complete the Plan by the end of the third quarter of 2024, subject to local law and consultation requirements.”
Luxury German automaker Mercedez-Benz was also forced to reevaluate its EV strategy to better align with consumer preferences. The company had previously set an ambitious goal to be all-electric by 2030. However, CEO Ola Källenius recently informed investors that the transition would take much longer than initially anticipated.
“Customers and market conditions will set the pace of the transformation,” the company stated. “The company plans to be in a position to cater to different customer needs, whether it’s an all-electric drivetrain or an electrified combustion engine, until well into the 2030s.”
Moreover, as consumer interest in EVs waned last year, there was additional pushback further down the supply chain. Thousands of car dealers around the country wrote an open letter to President Biden, urging him to pull back on his administration’s EV agenda as demand for the vehicles faltered.
The letter read in part, “Mr. President, it is time to tap the brakes on the unrealistic government electric vehicle mandate. Allow time for the battery technology to advance. Allow time to make BEVs more affordable. Allow time to develop domestic sources for the minerals to make batteries. Allow time for the charging infrastructure to be built and prove reliable. And most of all, allow time for the American consumer to get comfortable with the technology and make the choice to buy an electric vehicle.”
Featured image credit: By Alexander-93 – Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=137749938https://commons.wikimedia.org/w/index.php?curid=137749938
