Most of Nio's businesses will see layoffs, with the battery and phone businesses likely to be adjusted the most, according to local media.
(Image credit: CnEVPost)
Nio (NYSE: NIO) today released a plan for its employees on organizational and business optimization, including a reduction of around 10 percent of positions. Now, a new report offers more details.
The Chinese electric vehicle (EV) maker has recently laid out plans to streamline its team, which will initially involve thousands of people, local media outlet 36kr said in a report today.
Most of Nio's businesses will see layoffs, but the proportion will vary, with the battery and phone businesses likely to be adjusted the most, the report said, citing because people familiar with the matter.
Within the company, the move has been in the works for some time, having been hinted at in September, 36kr said, citing a person close to Nio.
Nio has not widely communicated the specific plans, but on November 1, it held a half-day-long meeting at its headquarters in Shanghai, where the human resources department informed some employees of the first number of layoffs, according to the report.
Nio has been expanding at a high rate over the past two years, adding new projects including batteries, chips, smartphones, second and third brands.
At the same time, Nio has expanded on its original businesses related to intelligence, energy, and users, more than doubling its staff over the past two years, making it the largest new Chinese car-making force, the 36kr report noted.
But Nio's performance has not kept up with the expansion of its business scale, with cash and equivalents decreasing by more than 6 billion yuan every quarter since the second half of last year, the report noted.
Nio's balance of cash and cash equivalents, restricted cash, short-term investments and long-term time deposits stood at RMB 31.5 billion as of June 30, down RMB 6.3 billion from RMB 37.8 billion at the end of the first quarter, according to its second-quarter earnings report, which was released on August 29. Nio has not yet announced a date for the release of its third-quarter earnings report.
The company reported revenue of RMB 8.77 billion in the second quarter, down 14.79 percent year-on-year and down 17.86 percent from the first quarter.
Nio's gross margin was 1.0 percent in the second quarter, down from 13.0 percent a year earlier and from 1.5 percent in the first quarter.
Nio believes the company is well positioned to focus on the execution of its sales strategy and drive a steady increase in deliveries, while further optimizing its cost structure and improving operational efficiencies, the company's management said in an August 29 analyst call.
During its first-quarter earnings call on June 9, Nio management said the company would manage its cash prudently and would defer investments in some fixed assets this year.
