Electric truck maker Nikola cuts 23% of workforce

Photo credit: Nikola Corp.

Nikola Corp. lays off 270 employees, about 23% of its workforce, and limits its electric vehicle efforts to North America to save money.

The company said on Friday it was laying off 150 workers supporting the company’s European programs. Another 120 employees at the company’s Phoenix and Coolidge, Arizona locations will also lose their jobs. Around 900 employees remain.

Nikola said the cuts are expected to cut staff spending by more than $50 million a year. Because of the cuts, the company’s annual cash spend is expected to fall below $400 million by 2024.

Shares fell 15% on Friday but rose about 1.7% in after-hours trading following the announcement.

“Nikola initiated a more focused business plan this quarter focused on North America, zero-emission truck production and our HYLA hydrogen business,” CEO Michael Lohscheller said in a statement. “Our battery electric truck is on the market and is serving our customers well, and the hydrogen fuel cell electric truck will be in production in a few weeks. We proactively manage costs and reduce expenses. We are streamlining operations, including our organizational structure, to efficiently achieve our goals.”

Nikola leadership has been trying to turn the company around since its founder and CEO, Trevor Milton, was indicted on federal securities fraud charges. While it’s made some progress, including installing a new CEO and preparing for commercial production, there have also been numerous delays.

In May, Nikola said the company had received a delisting notice from the stock exchange because the company’s share price had traded below $1 for the past 30 days. The company has until Nov. 20 to comply with Nasdaq’s floor price rule, which dictates that the stock price must be above $1 for 10 consecutive business days.

Nikola shares have traded as high as $65.90 in 2020 as the buoyant SPAC was led by Milton. Since then, shares have fallen to $1.19.

The company also pushed to issue more shares, but struggled to attract enough investors to the proposal. In June, Nikola adjourned its annual stockholders’ meeting to July 6 to secure the necessary number of votes to list shares. Nikola must secure more than 50% of all outstanding shares to vote in favor of the proposal, which is a higher hurdle than other proposals have to meet. Without the approval of this proposal, there could be delays or the end of production, the company said in a statement.