(Montreal) Taiga Motors has “temporarily” laid off 8% of its workforce in order to reduce costs at a time when its liquidity is being closely monitored by investors.
The Montreal company confirms that it “temporarily” laid off 31 employees, or 8% of its workforce, in January. The company hopes to recall them “quickly,” but the layoff could last up to six months.
“Last month’s temporary reduction in workforce is part of cost reduction objectives as Taiga aims for profitability, following a year of rapid production growth,” comments the company spokesperson in an email.
The news of the temporary layoffs was first reported by Radio-Canada, which cited an internal memo.
The temporary layoffs come at a time when Taiga’s liquidity is under scrutiny by investors. The company had also obtained emergency aid of 40.15 million from Investissement Québec and Northern Private Capital last March. The share of the financial arm of the Quebec government was 15 million.
As of September 30, Taiga had 5.8 million in its coffers compared to 22.8 million at the end of 2022.
At the end of September, the company concluded a $15 million guaranteed term loan agreement with Export Development Canada. The chief financial officer, Éric Bussières, predicted that the company would have used “between 10 million and 12 million” in the fourth quarter, during a conference call in November.
The finance chief had indicated that the company continued to seek new sources of financing for the coming quarters.
Analyst Cameron Doerksen of National Bank Financial estimated in November that the company would need additional financing. “We remain cautious on the stock as the company will need to significantly increase production over the coming years to achieve sustainable profitability and positive cash flow. We also believe that the company will need to obtain additional financing within two years to ramp up production. »
Taiga emphasized on Monday that it had built “more than 1,000 vehicles” in 2023, compared to 133 vehicles in 2022. In November, the company revealed that it had built 639 recreational vehicles during the first nine months of the year. year. The response from the Montreal company suggests that it has reached or exceeded the objective of producing 1,000 in 2023.
Governments and public agencies have paid nearly 34 million to Motor Taiga. The company specifies that the 30 million promised by the Quebec government for the Shawinigan plant have not yet been paid.
The project announced with great fanfare during the summer of 2021 is on ice, until the Montreal factory reaches a production rate of 8,000 vehicles. The Shawinigan plant was initially scheduled to be completed at the end of 2023.
Taiga shares were up 3 cents, or 3.26%, at 95 cents on the Toronto Stock Exchange in afternoon trading.