Nio, a prominent Chinese automaker known for its svelte, high-end electric SUVs, has started another round of layoffs in reaction to growing competition as well as the need to reduce expenses and reallocate resources.
In an internal letter that TechCrunch first published on Friday, William Li, the CEO of Nio, revealed this strategic move.
The firm's letter stated that following several weeks of talks regarding the company's two-year operations plans, there was an intention to fire roughly 10% of the staff.
This decision stemmed from various factors, among them being the commitment to further funding in core techs, facilitating competitive sales and service, launching new products and brands promptly, refining interconnected departments, eliminating unnecessary roles, and focusing resources more effectively on profitable endeavors in the coming three years.
Tough Decision
Nio aims to finish this restructuring process by November. CEO William Li sent a letter expressing his concern for how these changes had affected his coworkers, stressing the need for the move in the face of intense competition and drawing a comparison between Nio's journey and a difficult marathon.
"I'm sorry to colleagues who may be impacted by the adjustments. This is a tough but necessary decision against the fierce competition. Our journey is a marathon on a muddy track. Please stay focused on efficient execution and improvement of system capabilities," Li wrote, as quoted by TechCrunch.
Like other producers of pure electric vehicles (EVs), Nio has been under pressure from a pricing war that the US automaker Tesla started at the start of the year. Price battles have reduced the profitability of exclusive EV manufacturers. These companies have to tighten their budgets and establish pivotal partnerships to survive in a highly competitive market.
China Gearing to Dominate Global EV Industry
China's increasing influence in the automotive sector is the background against which the announcement of Nio's personnel restructure is set.
The nation's technical innovations in automation and electric car production have drawn interest from international manufacturers. Experts expect Chinese automakers to dominate the global market by the end of the decade.
This trend has led multinational automakers to develop strategic relationships and invest in Chinese electric vehicle startups and research institutes, as per a New York Times report.
Volkswagen, for example, announced plans to build a $1.1 billion automotive research center in Hefei, China, and also purchased a 4.99% share in XPeng, a Chinese electric car company. China's automobile industry's strong competitiveness has spurred significant technological advancements.
