Chinese EV startup NIO has laid off 70 employees across two Silicon Valley offices, one of which is now closed, according to a filing with California’s Employment Development Department. The cuts started in early April, shortly after the startup announced it was putting off 3% of its workforce in China.
Twenty employees were let go from the company’s North American headquarters and R&D center in San Jose, California, while 50 employees were cut out of NIO’s San Francisco office, which housed some of the startup’s user interface and expertise teams. The San Francisco office was closed.
The cuts are small relative to NIO’s total number of employees — the startup revealed it had 640 employees in the San Jose office alone at the end of 2018 and some 10,000 globally, according to the organization ’s financial filings — but they’re a sign that the young electrical automaker’s early momentum is cooling.
NIO says it wants to be “maximizing management efficiency this season ”
“After four decades of expansion, we’ve set up a global organization. However, problems have been posed by speedy development like work responsibilities that were unclear work tasks, operational departments, and work for people, & rdquo; a spokesperson for NIO said in a statement to The Verge. “We would love to resolve them by maximizing management efficiency this year. ”
Founded in 2014 as NextEV, NIO has designed the EP9, an all-electric supercar that’s one of the fastest in the world, and two SUVs, the ES8 and the ES6. The ES8 started shipping last summer, also NIO has delivered. The ES6 is slated to go into production.
NIO’s cars are being built by Chinese state-owned automaker Anhui Jianghuai Automobile Group, or JAC Motors. NIO originally intended to utilize JAC to make its cars while the startup constructed its own massive factory in Shanghai. However, the company announced it had abandoned those plans in March, and that it will continue to have its cars contract manufactured.
NIO became a publicly traded company on the New York Stock Exchange last September, though it raised far less money than it had originally hoped. And while NIO beat its own expectations for sales in 2018, it’s gotten off to a very slow start in 2019.
On a March 5th conference call with investors, NIO’s chief financial officer Louis Hsieh said he was “confident in [NIO’s] growth prospects in the coming year,” however that a forthcoming decision from the Chinese government to cut subsidies for electric vehicles was creating “doubt. ”
“Up until today, NIO has done just about everything right,” Michael Dunne, who conducts consulting company ZoZo Go. “From here, can they ramp production and sales while maintaining quality? That’s the test. ”
Update May 2nd, 1:44PM ET: NIO has closer to employees when counting those outside its R&D branches, as opposed. The third paragraph was updated.
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