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Canoo’s Financial Woes Continue as Employees Placed on Mandatory Unpaid Break
Electric vehicle startup Canoo has announced that its remaining employees will be placed on a “mandatory unpaid break” through the end of the year. This comes just days after the company furloughed dozens of its workers without pay.
According to reports, the affected staff members were notified via email and instructed to lock out of Canoo’s systems by the end of Friday. Although their benefits will continue through December, it is unclear what this break means for employees’ future employment with the company.
This development follows Canoo’s announcement last week that it would be idling its Oklahoma factories and furloughing employees in an effort to “finalize securing the capital necessary to move forward with our operations.” The company’s financial struggles have been well-documented, with a report from just last month stating that it had only around $700,000 left in the bank.
Despite these challenges, Canoo is reportedly attempting to stay afloat by announcing a 1-for-20 reverse stock split. This consolidation of its stock aims to keep it listed on the Nasdaq exchange and attract a broader range of investors.
Canoo’s financial struggles have been ongoing for some time, with warnings of insolvency first emerging in 2022. Since then, the company has experienced significant turnover among its leadership, including the departure of all its founders and more recent losses of its CFO and general counsel.
The company’s struggles have raised concerns about its ability to continue operating, particularly given its reliance on government contracts to remain afloat. Canoo was founded in 2017 with the goal of selling electric vans and trucks to adventure-seeking customers, but it has largely focused on producing vehicles for the US government instead.
In light of these developments, many are left wondering what this means for Canoo’s future and the fate of its remaining employees.
Source: www.theverge.com
