(Montreal) Tyga Motors has “temporarily” laid off 8% of its workforce to cut costs as its liquidity is scrutinized by investors.
The Montreal company confirmed in January that it had “temporarily” laid off 31 employees, or 8% of its workforce. The company hopes to recall them “soon,” but the layoff could last up to six months.
“As Taiga aims for profitability after a year of rapid production growth, the temporary reduction in workforce last month is part of cost-cutting objectives,” a company spokesperson commented in an email.
News of the 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 also received emergency aid of 40.15 million from Investment Quebec and Northern Private Capital last March. The Quebec government's finance department's share is 15 million.
As of September 30, Taiga had 5.8 million in its coffers, compared with 22.8 million at the end of 2022.
In late September, the company closed a $15 million guaranteed term loan agreement with Export Development Canada. Chief Financial Officer Eric Busiers estimated the company would use “between 10 million and 12 million” in the fourth quarter on a conference call in November.
The finance chief indicated that the company will continue to seek new sources of financing for the coming quarters.
Cameron Doerksen, an analyst at National Bank Financial, predicted in November that the company would need additional financing. “We remain cautious on the stock as the company will need to ramp up production significantly in the coming years to achieve sustainable profitability and positive cash flow. We believe the company will need to secure additional financing within two years to ramp up production. »
Tyga emphasized on Monday that it will build “more than 1,000 vehicles” in 2023, compared to 133 vehicles in 2022. In November, the company disclosed that it produced 639 recreational vehicles in the first nine months of the year. The response from the Montreal company indicates that the goal of producing 1,000 in 2023 has been met or exceeded.
Governments and public agencies have paid about 34 million to Motor Taiga. The company says it has not yet been paid the 30 million promised by the Quebec government for the Shawinigan plant.
The project, announced with great fanfare in the summer of 2021, will be on ice until the Montreal factory reaches a production rate of 8,000 vehicles. The Shawinigan plant was originally slated for completion in late 2023.
Taiga shares were up 3 cents, or 3.26%, at 95 cents on the Toronto Stock Exchange in afternoon trading.
