Nikola, Electric Truck Manufacturer, Plans 23% Reduction in Workforce

Nikola Corp. is implementing layoffs and narrowing its focus on electric truck production in North America to conserve cash. The company will lay off 270 employees, which accounts for around 23% of its workforce. This includes 150 workers supporting European programs and 120 employees at sites in Arizona. The cuts are expected to reduce annual personnel-related cash spend by over $50 million, bringing the annual cash spend under $400 million by 2024. Despite the layoffs, Nikola’s shares experienced a 15% decrease, but saw a 1.7% increase in after-market trading. CEO Michael Lohscheller stated that the company is undertaking a more concentrated business plan focused on zero-emission truck production and its HYLA hydrogen business. Nikola has faced challenges following the indictment of its founder and former CEO, Trevor Milton, for federal securities fraud. The company has until November 20 to comply with Nasdaq’s minimum price rule and avoid delisting. Additionally, Nikola has struggled to secure enough votes to issue more shares. Delays or cancellations in production may occur if the proposal does not receive the necessary approval.

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