Nikola Will Slash 23 Percent Of Its Workforce

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. About 900 people will remain employed.

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.

After the announcement, shares fell 15% on Friday, but rose about 1.7% in after-hours trading.

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 actively controlling expenses and managing 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.

Nikola said in May that the public exchange had sent it a delisting notice because its share price had been below $1 for 30 days. The minimum price rule of Nasdaq stipulates that the share price must remain above $1 for ten consecutive business days. The company has until November 20 to comply with this requirement.

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. To vote in favor of the proposal, Nikola must obtain more than fifty percent of all outstanding shares—a higher threshold than other proposals would require. According to the company’s statement, production could be halted or delayed if this proposal is not approved.