Lion Electric Reducing Workforce & Cutting Costs

Montreal-based Lion Electric Company has announced a reduction of its workforce and other cost-cutting measures the company said are aimed at further reducing its operating expenses and aligning its cost structure to current market dynamics.

"Current market dynamics, notably delays experienced with the Canada's Zero-Emission Transit Fund, continue to adversely impact our school bus deliveries and forced us to further reduce our workforce," said Marc Bedard, CEO and founder of Lion.

The workforce reduction affects approximately 120 employees, mostly Canada-based employees in overhead and product development functions. The company said this should not negatively impact its production capacity.

After the workforce reduction, Lion will have approximately 1,150 employees, with more than 600 of those working in manufacturing positions.   

"We sincerely regret the impact of this decision on our valued employees. It is however crucial to rightsize our workforce to the current environment. We remain confident in our long-term growth and that of our industry and, keeping our focus on our profitability objectives and our production requirements, we will continue to work tirelessly on the execution of our business plan,” added Bedard.

Additional Places Lion Will Be Cutting Expenses

In addition to the workforce reduction, Lion continues to undertake internal measures to reduce its cost structure, including in areas such as:

• Third-party inventory logistics
• Lease expenses
• Consulting
• Product development
• Professional fees

3 Rounds of Cost Cuts Should Save $40 Million

The workforce reduction and cost-cutting measures, combined with measures announced in November 2023 and February 2024, are expected to result in annualized costs savings of approximately $40 million, according to the company.

Lion Had Announced Earlier Job Cuts in November 2023

Following an announcement last November that workers in Joliet, Illinois, had declared their intent to unionize, Lion Electric announced plans to cut 150 workers, at that point 10% of the company’s total workforce. The 900,000-square-foot Joliet facility had opened months earlier, in July 2023.

The jobs proposed in that cut were in departments such as production overhead, manufacturing, product development, and administration in both Canada and the United States

Lion Reported a Net Loss of $103.8 Million in 2023

When Lion released its 2023 fiscal year report, annual revenue had increased to $253.5 million and surpassed the fiscal year 2022 mark of $139.9 million. The company reports its finanials based on US dollars, not Canadian.

However, there was a net loss of $103.8 million for 2003, compared to a net earnings of $17.8 million in 2022.

The company reported there was an “impairment of intangible assets and property, plant and equipment of $36.0 million and write-down of inventory of $9.8 million related to the LionA and LionM minibuses for which the company made the decision to indefinitely delay of the start of commercial production, as announced on November 7, 2023.”

In fiscal year 2023, Lion delivered 852 vehicles which was a significant increase over the delivery of 519 the prior year. In the fourth quarter of 2023, the company delivered 174 vehicles. The third quarter of the previous year saw the delivery of 174.