Layoffs have been a defining market trend of 2023 and they aren’t stopping yet. Yesterday, electric vehicle (EV) charging company EVgo (NASDAQ:EVGO) announced it will be laying off 40 workers. However, the company will also continue to hire for roles in operations. This news comes after a highly volatile month for shares. Now, the small-cap company is falling further and showing no signs of a rebound following news of the EVgo layoffs.
General market momentum is pushing many EV charging stocks down today, including ChargePoint (NYSE:CHPT) and Blink Charging (NASDAQ:BLNK), although they are showing more encouraging trajectories. As they attempt to rally, EVGO stock seems to be in a race to the bottom. This indicates the market may have little faith in its prospects.
Does this mean investors should give up on EVGO in 2023? Let’s take a closer look at the company and its future plans.
A Closer Look at the EVgo Layoffs
Investors have plenty of reason to be bullish on the EV charging sector this year. Both the U.S. and Europe have been prioritizing scaling charging infrastructure, leading to opportunities for companies. However, EVGO stock has done little to inspire investor confidence, spending the past six months declining steadily. As one Seeking Alpha contributor notes, its business model remains unproven. Now the EVgo layoffs are casting a new shadow over its future.
Per a statement released by the company:
“We are aligning our workforce to capture growing market share in an evolving industry. EVgo is also focusing on operational excellence and efficiencies by optimizing our cost structure with continued resource investments in growth initiatives.”
Plenty have called EVgo one of the EV charging stocks to buy for growth over the coming years. While news of job cuts is never encouraging, it should be noted that EVgo hasn’t stopped hiring completely. This suggests it’s indeed focused on restructuring. For that reason, investors shouldn’t count the company out. The EVgo layoffs could also signal an important turning point.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.