Fisker Automotive has apparently slashed 75 percent of its workforce. Reuters cites sources who said the sudden job cuts were the automaker’s latest attempt to prevent bankruptcy.
The government-backed company apparently provided a statement to Reuters confirming that it laid off approximately 75 percent of its workers. According to the statement, “it was a necessary strategic step in our efforts to maximize the value of Fisker’s core assets.”
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Fisker Automotive has raised $1.2 billion in investments and accepted almost $200 million in government-backed loans. A source familiar with the struggling automaker’s finances told Reuters that the company has “at least” $30 million in cash and an additional $15 million coming after it settled a legal claim with A123 Systems Inc, the battery maker which filed for bankruptcy recently.
The number of jobs that were cut today amounted to about 160 positions. At the meeting when the cuts were announced, the company reportedly told employees it couldn’t afford to pay severance payments. At least 50 executives were asked to continue working for the company to seek buyers for its assets.
Meanwhile negotiations are continuing between the automaker and the Department of Energy. Fisker Automotive is reportedly trying to renegotiate a $10 million loan payment that’s due to the agency later this month. The company hired a law firm last week to consider the possibility of bankruptcy as well.
Fiskar has only produced one model since it began. The Karma is a plug-in hybrid vehicle that sells for over $100,000, and one hasn’t rolled off the production lines since last July. The Department of Energy originally approved the company for a $529 million loan as part of President Obama’s vehicle development program. However, the agency froze the company’s credit line in 2011 because of the delays in the launch of the Karma.
Company founder Henrik Fisker resigned last month in the wake of a number of disagreements with executives at the automaker.