According to foreign media reports, electric truck manufacturer Nikola confirmed that the company will carry out a new round of layoffs. Nikola is currently in great financial trouble, and the hydrogen-powered truck manufacturer is making a last-ditch effort to avoid bankruptcy.
More than two years ago, Nikola’s founder and former CEO was convicted of fraud for lying to shareholders about the company’s technology. At that time, many people thought that this would be the end of the company, which was once worth $34 billion, but now the company is still alive. Although it is just lingering on, it is still struggling to support.
In the past two years, Nikola has experienced many difficulties, such as many problems with its pure electric trucks, which caused the vehicles to catch fire and the company had to recall the entire fleet.
So Nikola gave up pure electric trucks and turned to hydrogen-powered trucks, but lost a lot of money in sales, and some customers reported some serious problems with the vehicles.
Nikola loses about $200 million per quarter, and as of the end of the last quarter, the company had almost only $200 million in cash. As the market expects the company to go bankrupt, the company is currently valued at about $100 million.
In a series of filings with the U.S. Securities and Exchange Commission (SEC) this week, Nikola disclosed that it had successfully obtained $65 million through transactions with noteholders. At its current rate of cash burn, this will buy the company about a month.
In addition, Nikola also announced that it would sell more shares in an attempt to raise $100 million. However, the company also disclosed some serious problems in the documents.
Nikola confirmed that the company does not have enough funds to survive the next quarter: “We currently expect that the existing financial resources will only be sufficient to support our expected operating costs and meet our obligations until the first quarter of 2025, but not for the entire quarter.”
Nikola also announced that it will further lay off employees this month to reduce the rate of cash consumption: “For example, in October and December 2024, we reduced the number of employees in order to better match our staffing with current needs.”
The layoffs in October accounted for about 15% of Nikola’s total workforce. It is not clear how many people will be affected by the new round of layoffs this month. Last week, a drone captured footage of Nikola’s Arizona factory, showing less activity than usual, with many trucks parked on the grounds without battery packs installed.
Nikola warned that layoffs could negatively impact its activities because they could “cause a loss of institutional knowledge, decrease team morale, adversely affect our reputation, and cause challenges for the company in attracting new talent.”