NIO president Qin Lihong (秦力洪) has indicated that the Chinese new energy car maker cut 1,000 jobs in the first half of this year as the firm sought to adjust staff structure and enhance operating efficiency.
The Shanghai-based car maker slashed most jobs across its research and marketing operations, according to people familiar with the matter. Staff restructuring happened around every two months since January this year, and some divisions have reduced headcounts by as much as 30%, one of the sources said.
Job cuts also took place overseas. It was reported in April that NIO laid off 50 workers from its research center in California, and another 20 employees from its San Francisco office. As of May 2019, NIO had cut 70 jobs at two offices in Silicon Valley and closed one of the offices.
Massive job cuts indicate NIO’s lackluster financial performance. Ever since being listed on NYSE in September last year, NIO has been hit by several stock slumps, which saw almost 70% pared off its share value in three months.
According to its financial report for the first quarter, the company posted a net loss of USD 378 million. Moreover, accumulated losses since its birth had exceeded USD 2.9 billion. So far, NIO has not disclosed its second quarter financial results yet.
In addition, NIO recalled 4,803 electric cars with potential battery problems on June 27 this year, further exacerbating its operating performance.
Caught in a capital crunch, NIO received USD 1.44 billion from a Chinese government investment fund on May 28. However, NIO continued to seek fundraising through activities ranging from borrowing from banks to siphoning off its battery department for new round of financing and selling its FE racing team.
Amid the downturn of global vehicle market, plenty of car makers have kept a tight grip on expenses and even resorted to job cuts. Vehicle manufacturers such as GM, Ford, Honda and Tesla successively announced plans to cut jobs in the first half of the year.
People familiar with automobile industry said job cut is pretty normal when vehicle sales hit a snag.