Nio, China’s answer to Tesla, is planning a major layoff round which could affect about 1,200 staffs by the end of next month.
An internal email leaked to the press said the company was facing “big changes” in their internal and external environment in the past six months and that it needed to “further control spendings” and “improve operational efficiency” in a timely manner to “ensure” its survival. Nio has confirmed the authenticity of the email with KrASIA.
Nio needs to cut down its headcount to about 7,500 by the end of September, the company’s founder William Li said in the email. “I am very sorry for this,” he said.
The new layoff plan comes only a few weeks after a Nio executive admitted letting go about 1,000 employees since the beginning of this year.
Regarding the first wave of layoffs, Nio’s president Qin Lihong told 36Kr that the staff cuts were “what we need to do at this stage.”
The Shanghai-based company had a tough time in the past few months with disappointing financial and sales performances. It has recorded losses in three consecutive quarters since its initial public offering last year.
Nio booked only RMB 1.6 billion (approximately USD 226 million) in revenue the first quarter of 2019, down 52.5% from the previous quarter. The company has also scrapped a plan to build its own manufacturing facility in Shanghai.
Earlier in June, it announced a massive recall plan of nearly 5,000 electric vehicles(EV) due to safety concerns related to its battery packs.
The company delivered only 837 EVs last month, a 37.5% month-on-month drop from June.