Electric Vehicle Startup Canoo Furloughs Employees Amid Financial Strain
Canoo, the electric vehicle startup founded in 2017, has implemented a series of cost-cutting measures, including furloughing dozens of employees without pay, as it grapples with severe financial challenges. The company, known for its innovative electric vans and trucks, informed the remaining staff of a “mandatory unpaid break” that will extend at least through the end of the year.
During this period, employees will be locked out of Canoo’s systems, although the company has stated that benefits will continue through the end of the month. This drastic move comes in the wake of recent financial disclosures revealing that Canoo had only about $700,000 in the bank last month.
In a bid to secure its future, Canoo has announced the idling of its Oklahoma factories while actively seeking additional capital to sustain operations. The company has also declared a 1-for-20 reverse stock split, set to take effect on December 24th. This strategic decision aims to maintain Canoo’s Nasdaq listing and potentially attract more investors.
Since its inception, Canoo has pivoted from its original goal of selling electric vehicles to adventure-seeking consumers, instead focusing primarily on producing vehicles for the US government. This shift in strategy, however, has not shielded the company from financial instability, with analysts previously warning of the risk of insolvency.
Adding to the company’s challenges is a significant turnover in its executive team. All of Canoo’s founders have departed, and recent months have seen the exits of both the CFO and general counsel.
As Canoo navigates these turbulent waters, industry observers remain watchful of the company’s ability to secure funding and resume normal operations in the competitive electric vehicle market.
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