Electric Car Maker Fisker Warns of Layoffs Next Month if Funding Falls Through
Electric car company Fisker warned employees Tuesday that they could be laid off next month and its facilities could be closed if the company can’t secure more funding.
“Fisker has been diligently pursuing all avenues to address its ongoing operating cash requirements, including continuing discussions with potential purchasers and investors, and exploring various restructuring alternatives,” the company said. “However, there can be no assurance that these efforts will be successful.”
An email sent to employees Tuesday by the company’s newly appointed restructuring officer said they could be terminated as of June 28, and that “Fisker’s facilities will be closed.” The company had informed employees last week that it had hired a restructuring officer.
Three current employees told Insider that everyone they’ve spoken to at Fisker has said they received the same notice. Fisker is headquartered in Manhattan Beach, California, but also has facilities in La Palma, California, as well several international locations, including Munich and Vienna.
A Fisker spokesperson told Insider that the company is working to determine the best path forward.
“Decisions of this nature are made after careful consideration and an examination of available options, including appropriate locations and workforce for the evolving business, as well as our ability to manage liquidity and inventory sales,” the spokesperson said in an email.
“The actions we are taking are intended to provide the company with additional runway so that we may continue to maximize the value of the business and explore strategic alternatives,” the spokesperson added.
Here’s the full text of the warning Fisker sent to employees:
As you know, Fisker Group, Inc. (Fisker) previously announced that it will provide updates regarding certain material developments that may impact the Company’s workforce. Over the last several months, Fisker’s leadership team has been diligently pursuing all paths to preserve the Company’s business and determine a path forward.
Fisker has been diligently pursuing all avenues to address its ongoing operating cash requirements, including continuing discussions with potential purchasers and investors, and exploring various restructuring alternatives.
However, there can be no assurance that these efforts will be successful.
In the event this occurs, the Company is obligated to provide you with “conditional notice” that you are subject to termination of employment, including you, effective June 28, 2024. Should the Company proceed with terminating your employment in the future, your termination of employment will be permanent, and the facilities will be closed.
The Company does not have a policy or practice to create employment rights for employees terminated from employment with the Company. In the event it becomes necessary, we will provide you with additional information regarding the termination of employment, including information related to unemployment status, COBRA, and severance.
This notice does not mean that the Company will close operations or cease business, and receipt of this conditional notice does not necessarily mean that you will be terminated. Fisker is operating in challenging circumstances, and the Company is working diligently to pursue an outcome that facilitates a new investment or other strategic alternatives.
We appreciate your continued dedication and support to the Company during this challenging time. Thank you for your hard work and contributions to Fisker.
In the interim, please feel free to contact me, John DiDonato, Chief Restructuring Officer, should you have any questions.
Respectfully,
John DiDonato
Fisker was among a group of once high-flying electric-vehicle startups that went public earlier this decade, many via special-purpose acquisition companies (SPACs), which helped fast-track their path to the public markets. Their ascent coincided with a surge of investor enthusiasm for companies seen as having the potential to follow in Tesla’s footsteps and disrupt the competitive auto industry.
But the companies have since grappled with the complexities of mass production and, more recently, waning demand for battery-powered vehicles from US car buyers.
Fisker delivered its first vehicles to US customers in June, just as worrying signs began to emerge about slowing sales growth. The company has slashed its demand forecast twice in the past year and cut prices, citing a “competitive landscape.”
If Fisker files for bankruptcy, it would be the second automotive-related venture to collapse for Henrik Fisker, a former car designer for BMW and Aston Martin. His first company, Fisker Automotive, filed for bankruptcy in 2013.
Fisker’s share price has plunged more than 97% since its 2020 IPO, to 32 cents per share at Wednesday’s close. Its stock has traded below $1 for the past year and is at risk of being delisted from the New York Stock Exchange.
This story is developing. Please check back for updates.
