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Dive Brief:
- Zero-emission vehicle maker Lion Electric lays off 120 workers per press releasewhich primarily affects Canadian-based workers in overhead and product development.
- The workforce reduction was crucial given the current environment, CEO and founder Marc Bédard said in a press release. He reported delays from Canada Zero Emissions Transit Fund as a driving factor.
- Lion Electric, which makes Class 5 to 8 buses and trucks, said the move should not adversely affect production capacity.
Dive Insight:
The workforce reduction is combined with other cost-cutting measures to save about $40 million annually, according to the company.
These other cost-cutting measures affect areas such as lease expenses, product development and third-party inventory logistics, according to the company’s release.
The layoffs, about 9 percent of its workforce, reduce the staff to about 1,150 employees.
“Current market dynamics, particularly the delays experienced with the Canada Zero Emissions Transit Fund, continue to negatively impact school bus deliveries and have forced us to further reduce our workforce,” Bédard said in the release.
The fund supports the purchase of 5,000 zero-emission buses by industry for the country.
Lion Electric previously laid off 150 workers, about 10 percent of its workforce, in November related to manufacturing overhead, manufacturing, product development and administrative duties.
Just looking at revenue and cost of sales, the OEM also posted approx $5.5 million in gross damage last year. The loss followed a A gross loss of $12.9 million in 2022 and gross profit of more than $45,000 in 2021, according to annual reports.
In February, the company also introduced a temporary layoff about 100 employeesmainly affecting night shift production at the Saint-Jerome production facility.
As Lion Electric strives to disrupt the industry, it is not alone in its operational challenges. Other EV manufacturers also made significant layoffs.
In February, pickup truck maker Rivian began cutting 10% of its workforce, after cutting 1% this month. Automotive Dive reported. Last June, heavy-duty truck maker Nikola cut its workforce by 270, shifted its focus to North America and made other cost-cutting moves in an effort to save over $50 million annually.