British electric vehicle company Arrival SA said on Tuesday it planned to reorganise its business, which could result in up to 30% reduction in its workforce.
Arrival said the move will enable it to start production of its Arrival Van in the third quarter as planned, sending its shares up 3.4% to $1.51 in extended trading.
The restructuring, which the company said is in response to a challenging economic environment, aims at a 30% cut in spending to help meet its business targets until late 2023 using the $500 million cash on hand.
This comes after bigger player Rivian Automotive said it will brief employees on Friday on potential layoffs, while Tesla Inc said it would cut 229 jobs.
Arrival is one of the many EV startups that went public in the last two years through reverse mergers with SPACs. Its strategy was building electric delivery vans and buses using smaller, less costly factories.
However, its U.S.-listed stock has tumbled 80% so far in 2022, as investors, worried about the economy, abandon companies that do not turn a profit.
Arrival posted a net loss of $10.4 million in the first quarter.
The company added it will provide a business strategy update on its second quarter earnings call on Aug. 11.
(Reporting by Chavi Mehta in Bengaluru; Editing by Shailesh Kuber)
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