Electric-Car Startup Nio Shifts Gears With Plans to Fine-Tune Workforce
Electric-car maker Nio Inc. has begun fine-tuning its workforce with plans for modest job cuts this year, following a period of breakneck growth that saw it become China’s first such startup to move its products from the drawing board to the showroom.
Nio achieved two major milestones last year, first when it began selling its first electric SUV last summer, and then later when it raised $1 billion through a New York initial public offering (IPO) in September. The company last year sold 11,348 of its inaugural model, the ES8, generating 4.85 billion yuan ($725 million) in sales.
The company had nearly 10,000 employees at the end of last year, following a rapid buildup as its business revved up. But having achieved its current position, it is taking a step back to “optimize” its large operation, founder and President Qin Lihong told Caixin. Specifically, the company is planning to cut about 3% of its workforce over the four months starting from the end of February this year, he said.
“Nio is a startup, we’ve never done a serious later stage adjustment before,” he said. “This is the first year, there will definitely be some workers who aren’t too appropriate. An evaluation will show that some are redundant, some don’t have enough work. There are people coming in and out of each department, there is definite room for adjustment.”
Nio’s biggest concentration of workers currently comes from its various “customer experience” departments — which includes sales — with about 4,000 workers in such areas. Its tech and product development operations employ another 3,500. Manufacturing is a relatively small division by comparison, employing about 1,000, since a third-party currently builds the company’s cars.
Nio was aiming to build its own manufacturing plant in Shanghai, but those plans hit an obstacle when China’s state planner took measures to slow down such development in the overheated space. Now the company must wait for a previously approved plant being built in the city by U.S. giant Tesla Inc. to complete its first phase before Shanghai can approve a second such project.
“The first project (being built by Tesla) to be approved must reach its production targets first, and only then can they approve a second,” he said. “Tesla’s capacity plans for its first-stage are rather large, so we made a decision that Nio can’t wait” that long.
Qin added that Nio is currently looking for other manufacturing partners to help make its second generation of vehicles that will hit the market around 2021, and that he hopes to make an announcement in that regard in the next few months.
The company’s shares have traded in a wide range since its IPO last September, including some modest gains. But more recently the stock has slumped and is now down nearly 30% below its IPO price. The company is facing multiple class action lawsuits alleging it misled investors about the planned new manufacturing facility during its IPO and failed to disclose the impact of reductions in government subsidies for electric cars.
Contact reporter Yang Ge (email@example.com)
- 1Exclusive: Davos Photo Used by U.S. Congressman to Criticize China Didn’t Show Anyone Chinese
- 2Tencent Fires Gaming, Fintech Staff in Wake of Miserable First Quarter
- 3In Depth: As Mass Covid Testing Becomes China’s New Normal, Debate Grows Over Who Pays
- 4In Depth: China’s Plan to Overhaul Its $3.7 Trillion Mutual Fund Industry
- 5China Suspends Overseas Tours, Discourages Citizens From Going Abroad
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas