Due to a significant drop in new vehicle deliveries and the continued slowdown of car sales in China, electric vehicle manufacturer Nio Inc has announced that it will be cutting jobs to cut down on its operations costs. The announcement was made through an internal email that was sent late last week, warning employees of jobs cuts in the coming days.
The company's founder, William Li, mentioned in the email that the company was going to be reducing its workforce by around 1,200 staff members. The electric firm is aiming to retain only around 7,500 employees by the end of September.
Li explained in the email that the decision to cut jobs was made due to the changed in the internal and external environment of the company. While it was a hard decision to make, the jobs cuts will apparently be necessary to ensure the survival of the company as a whole.
The founder also stated that the Nio will now be renewing its plans and focus on the further development of its core businesses. This means that the layoffs will have very little impact on core departments, such as the company's research and development unit. Instead, the job cuts will be made on less crucial departments, such as finance, legal affairs, human resource, and other support departments.
The recent layoff is the second major internal shuffle within the company this year. In March, Nio had cut more than 1,000 people from its workforce. The Chinese carmaker has been having a tough time keeping up with its expenses this year, mainly due to lowered new vehicle deliveries.
For the first seven months of the year, Nio was only able to deliver a total of 8,379 vehicles, barely reaching 21 percent of its minimum sales target of 40,000 vehicles. In July, Nio was only able to deliver 837 new vehicles.
Due to its falling new vehicle deliveries and expensive operational costs, Nio had posted a $370 million loss for its first quarter. The loss was a 71.36 percent increase over the same period last year. Overall revenues for the first quarter also fell by 54 percent to only $230 million when compared to the same period last year.
The company's stock prices have suffered over the years, falling by more than half of its initial public offering (IPO) price in the New York Stock Exchange. Nio priced its shares at $6.26 in September of last year. Its prices have tumbled since then, reaching less than $3 per share at its lowest point. From its peak, Nio's market valuation has decreased by more than $9 billion.
