American manufacturer of heavy-duty commercial battery-electric vehicles, fuel-cell electric vehicles, and energy solutions, Nikola, has downsized its workforce by 23%, which is about 270 employees as it proactively cut costs and reduced expenses.
The company on Friday stated that it will lay off 150 workers who were supporting the company’s European programs. Also, it will lay off another 120 employees based at the company’s Phoenix and Coolidge, Ariz sites.
Speaking on the downsizing of part of its workforce, Nikola CEO Michael Lohscheller said,
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
“Nikola has initiated a more focused business plan this quarter, concentrating on North America, zero-emission truck production, and our HYLA hydrogen business. Our battery-electric truck is in the marketplace and performing well for our customers, and the hydrogen fuel cell electric truck will go into production in a matter of weeks. We are proactively managing costs and reducing expenses. We are streamlining operations, including our organizational structure to efficiently execute our objectives”.
Nikola revealed that the cuts are expected to decrease personnel-related cash spend by more than $50 million annually. As a result of the cuts, the company’s annual cash spend is expected to decrease to $400 million by 2024.
Founded in 2015, Nikola set out to make zero-emission big rigs using hydrogen fuel cell technology. On June 4, 2020, it went public on NASDAQ under the symbol NKLA.
In July 2021, a United States federal grand jury indicted Nikola founder and former CEO Trevor Miltonbut did not indict the company. The indictment charged Milton with three counts of criminal fraud for lying about nearly all aspects of the business and two counts of securities fraud.
In February 2022, the company then installed Michael Lohscheller as the new CEO. In a statement, Nikola chairman Steven Girsky said in his six months since joining the company Lohscheller has brought “an increased sense of urgency” and “accelerated decision-making.
The new CEO Is reported to have already made several notable achievements, including having a major impact in moving the Tre battery-electric vehicle (BEV) into series production and achieving development milestones for the Tre fuel cell electric vehicle, the company says.
In February 2022, the company projected deliveries of between 300 and 500 of its first battery-electric semi trucks known as the Nikola Tre to customers.
In February 2023, the pioneering manufacturer of hydrogen electric vehicles, announced that it has selected PlusDrive to be offered on Nikola Tre vehicles coming to market in 2024. PlusDrive, developed by automated truck developer Plus, is designed to enhance safety, fuel efficiency, and driver comfort. It will be available on Nikola’s battery-electric and hydrogen-electric vehicles sold in the U.S.
However, last month, the electric truck manufacturer Nikola Motor was threatened with exclusion from the US stock exchange Nasdaq, because the share price was below $1 per share for 30 consecutive days.
The company has been granted a grace period until 20 November 2023 to comply with the regulations. Nasdaq has a minimum share price rule that requires the share price to be above $1 for 10 consecutive business days.
Electric truck company Nikola has laid off 270 people in an attempt to reduce costs and focus on the North American market. Only 900 employees will remain as 150 workers were cut from its European programs and another 120 in Phoenix and Coolidge, Arizona were also impacted. The staff reduction will save the company $50 million annually, with the overall effort reducing spend by almost $400 million by 2024. The cuts come amid a challenging time for Nikola between leadership shakeups and overall cash issues currently affecting several EV startups. (LinkedIn News)