Chinese EV Maker Nio Contemplates Further Layoffs Amid Financial Troubles

In the face of financial hardships, Nio Inc., a Chinese electric vehicle (EV) manufacturer, is reportedly deliberating additional layoffs, following a recent cut of 10% of its workforce.

What Happened: Bloomberg reported that inside sources have revealed Nio’s contemplation of extra job cuts as a measure to trim costs and boost performance efficiency. Some divisions within the company have been asked to brace for potential layoffs, which could increase the initial dismissal figures to a range of 20%-30% within the affected departments.

The proposed job cuts would primarily target non-core businesses or those that require significant investments without promising quick returns. On the other hand, Nio’s core business areas, such as sales, are still in the hiring process.

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Why That Matters: Despite being a former luminary in the Chinese EV market, Nio has been unable to reach its sales targets, repeatedly recording losses. The company, with a workforce of 26,763 at the end of 2022, has business interests in electric vehicles, battery and semiconductor manufacturing, and mobile phones.

Its plans for international expansion, including entering the U.S. market, have been postponed or stopped altogether. On Tuesday, Nio projected a Q4 revenue of up to 16.7 billion yuan ($2.3 billion), which falls below analysts’ average estimate of 21.4 billion yuan ($3.01 billion)

A spokesperson from Nio denied any plans for additional layoffs, stating that the company would continue to make “dynamic adjustments” in its operating markets. Despite a slump to a low of 1% in Q2, Nio’s gross margin bounced back to 8% in the three months ending Sep. 30. The company only managed to ship 142,026 EVs through November, falling short of its annual target of 250,000 units.

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Photo by Andy Feng on Shutterstock