Nikola Cuts 270 Jobs to Slash Costs
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Nikola Corp. will cut 270 jobs, including 120 in the United States, as the beleaguered truck maker seeks to slash cash outflows, the Phoenix-based company said.
As part of winding down the company’s European operations following May’s strategic U-turn and revamp of its business plan, a total of 150 employees at various European sites will be laid off, the company said in a statement June 16.
Another 120 will be let go at the company’s Phoenix and Coolidge, Ariz., sites as part of Nikola’s pivot to Class 8 hydrogen fuel cell vehicles from battery-electric trucks in a cost-cutting program.
Nikola expects the job cuts to cleave $50 million from its annual cash outflows, part of May’s plan to cut cash burn to $150 million a quarter from $200 million a quarter in 2022.
This quarter, Nikola initiated a more focused business plan concentrating on North America, zero-emission truck production, and our HYLA hydrogen business. Read today's progress update to learn how these efforts are positively impacting our objectives https://t.co/ogQWz6AOkR — Nikola Motor Company (@nikolamotor) June 16, 2023
When the departures are complete, Nikola will be left with 900 employees charged with effecting a turnaround and the start of production of its hydrogen fuel cell trucks, which the company said in May would begin in July. In its latest statement, the company said the plan for a July launch date was still on schedule.
“We are proactively managing costs and reducing expenses. We are streamlining operations, including our organizational structure, to efficiently execute our objectives,” said CEO Michael Lohscheller.
Nikola currently has 178 hydrogen truck sales orders from 14 end customers, it said June 16, compared with 140 orders from 12 customers in May when releasing its first-quarter 2023 earnings and unveiling the remodeling of its business.
Alongside cutting its costs, Nikola hopes to raise more funds to sustain production of its Tre hydrogen semi and build out its HYLA hydrogen fueling infrastructure with Herndon, Va.-based partner Volterra.
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To do so, the company plans to issue more shares, but first it needs the backing of existing shareholders. That plan is currently in a holding pattern, though. On June 7 Nikola adjourned its 2023 annual stockholder meeting until July 6 after failing to win enough support from beleaguered existing investors.
The company said more than 77% of the equity owners that voted through June 6 had been in favor of the plan, but not enough stockholders voted.
If the shareholders do not vote in sufficient numbers for a dilution of their holdings, Nikola has warned it may need to carry out a reverse stock split and that the company’s future as a going concern would be in peril.