Lion Electric announced it plans to reduce its headcount among other cost-cutting measures to align its cost structure with the current market dynamics.
Shares of the Montreal-based company, which makes all-electric medium and heavy-duty vehicles, fell on the news. It traded 7.6% lower at US$0.96 in the early afternoon on Thursday.
The company said its headcount reduction will impact approximately 120 employees, mostly Canada-based workers in overhead and product development roles.
It said the job cuts are not expected to negatively impact its production facility. Post-cuts, Lion Electric said it will have 1,150 employees, including more than 600 manufacturing positions.
Additionally, the company said it is taking other internal measures to reduce costs across areas such as third-party inventory logistics, lease expenses, consulting, product development and professional fees which, when combined with the workforce reduction and previously announced cost-cutting efforts are expected to result in cost savings of $40 million per year.
"Current market dynamics, notably delays experienced with Canada's Zero-Emission Transit Fund, continue to adversely impact our school bus deliveries and forced us to further reduce our workforce," Lion Electric CEO Marc Bedard said.
"We sincerely regret the impact of this decision on our valued employees. It is however crucial to rightsize our workforce to the current environment."