Lion Electric Layoff 300 Employees
What is the reason for Lion Electric layoff?
Lion Electric Co. has announced a significant reduction in its workforce as part of a strategic plan to curb financial losses. The electric bus manufacturer will lay off approximately 300 employees in the coming days, representing a 30 percent reduction in its workforce. The company anticipates that most of these layoffs will be temporary.
Earlier this year, Lion Electric had already laid off around 220 employees in February and April. The Montreal-based company states that these layoffs are necessary to better align its costs with current demand. Alongside workforce reductions, the plan includes scaling back production of electric trucks, launching a new product line to sell its battery packs to third parties, and potentially leasing out a substantial portion of its Joliet, Illinois plant.
How Has Lion Electric’s Financial Performance Been Affected?
The announcement coincides with Lion Electric’s second-quarter financial report, which revealed a 63 percent increase in net losses, amounting to $19.3 million, and a 48 percent decline in revenue, dropping to $30.3 million compared to the previous year. In the quarter ending June 30, the company delivered 101 vehicles, marking a nearly 50 percent decrease from the same period last year. Despite the downturn, Lion Electric posted a diluted loss of nine cents per share, slightly better than the loss of five cents per share reported a year ago, and beating analysts’ expectations.
This latest round of layoffs and production scaling underscores the challenges Lion Electric faces in the current market environment, as it seeks to balance costs and demand while exploring new revenue streams.
Severance Benefits for Lion Electric Employees
In Canada, non-unionized Lion Electric employees who lose their jobs due to downsizing or corporate restructuring are eligible for comprehensive severance benefits. These packages can provide up to 24 months of compensation, depending on various factors. If employees do not receive the full severance they are entitled to, they can pursue legal action to ensure fair treatment and secure appropriate compensation.
At Whitten & Lublin, our employment lawyers are committed to helping individuals understand their rights and obtain the severance they deserve. If you have been affected by recent layoffs at Lion Electric, we invite you to contact us for a consultation. Reach out through our online portal or by calling (416) 640 2667.