In a clear last-ditch effort to remain afloat, Fisker (OTCMKTS:FSRN) is significantly reducing its workforce. The struggling electric vehicle (EV) startup just informed hundreds of workers that their jobs have been eliminated as of Wednesday, May 29. Impacted staff members were part of many different teams, including design, content and social media.
This is by no means the first round of layoffs that Fisker has announced this year — it’s actually the third month in a row that Fisker has opted for job cuts. But according to sources who spoke to TechCrunch, the company’s employee base is now only 150 workers. As Fisker stock continues to trend downward, this news raises serious concerns about how long the company has left.
Fisker Stock After the Layoffs
For months, Fisker stock has been bleeding value as the company’s problems pile up. Since being delisted from the New York Stock Exchange, FSRN stock has been subject to high volatility that has resulted in shares plunging deeper and deeper into the red. As of this writing, Fisker has fallen more than 96% over the past six months.
When a company falls by that much and continuously slashes its workforce, it’s not hard to see that its days are numbered. Investors have likely wondered just how bad things really are at Fisker. Now, this news provides some context into just how grim its prospects are. As TechCrunch reports:
“Founder and CEO Henrik Fisker told employees that the large investor his company owes money to — and the chief restructuring officer working on the investor’s behalf — wanted to let more people go, according to employees who attended. Fisker has never disclosed who is ultimately behind the convertible debt investment in question, though Henrik Fisker did reference Heights Capital Management during Wednesday’s meeting when discussing the layoffs, according to the two employees. Heights Capital Management is an affiliate of financial services giant Susquehanna International Group.”
At this point, even laying off workers isn’t likely to save Fisker stock. In just the past week, Fisker has significantly scaled back its direct sales. What’s more, as InvestorPlace’s Eddie Pan reports, the company has witnessed a massive decline in institutional investment, with net 13F exposure falling almost 95% during the first quarter of 2024. Wall Street is clearly moving away from FSRN stock and it doesn’t seem like even the retail trading crowd has much interest.
The Road Ahead
Earlier this month, I reported that Fisker is careening toward a cliff with seemingly no chance at changing course. These recent, large-scale layoffs further support that bearish thesis and will likely accelerate the speed at which Fisker stock plunges. Other micro-cap EV penny stocks could follow suit, but right now, even unstable meme stock Mullen Automotive (NASDAQ:MULN) looks like a better bet than Fisker.
It doesn’t seem possible that Fisker can continue operations for any length of time with such a small workforce. This company is doing everything within its power to keep its doors open, but it can only delay the inevitable for so long. In this case, the end seems to be approaching more quickly with every new headline.
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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.
