Dive Brief:
- Zero-emission vehicle manufacturer Lion Electric is laying off 120 workers, per a news release, affecting mostly Canada-based workers in overhead and product development.
- The workforce reduction was crucial given the current environment, CEO and founder Marc Bédard said in a news release. He cited delays from Canada’s Zero-Emission Transit Fund as the driving factor.
- Lion Electric, which makes buses and Class 5 to Class 8 trucks, said the move should not negatively affect production capacity.
Dive Insight:
The workforce reduction joins other cost-cutting measures to save about $40 million annually, according to the company.
Those other cost-cutting measures affect areas such as lease expenses, product development and third-party inventory logistics, per the company’s release.
The layoffs, about 9% of its workforce, reduces staffing to approximately 1,150 employees.
“Current market dynamics, notably delays experienced with the Canada’s Zero-Emission Transit Fund, continue to adversely impact our school bus deliveries and forced us to further reduce our workforce,” Bédard said in the release.
The fund is supporting the purchase of 5,000 zero-emission buses from the industry for the country.
Previously, Lion Electric laid off 150 workers, approximately 10% of its workforce, in November related to production overhead, manufacturing, product development and administrative duties.
When just looking at revenue and cost of sales, the OEM also posted a nearly $5.5 million gross loss last year. The loss followed a $12.9 million gross loss in 2022, and gross profit of over $45,000 in 2021, according to annual reports.
In February, the company also detailed a temporary layoff of approximately 100 workers, mainly affecting night-shift production at its Saint-Jerome manufacturing facility.
As Lion Electric seeks to disrupt the industry, it is not alone in its operational challenges. Other EV makers also proceeded with significant layoffs.
In February, pickup truck maker Rivian began cutting 10% of its workforce, following by a 1% reduction this month, Automotive Dive reported. Last June, heavy-duty truck manufacturer Nikola reduced its headcount by 270, concentrated its focus on North America and made other cost-cutting moves in an effort to save over $50 million annually.
