Electric Last Mile Solutions Inc. said it will lay off 50 employees, or about 24 percent of total headcount, as the fallout from the sudden resignation of its leadership last month continues.
The electric delivery vehicle startup’s plan to cut employees — “part of an overall plan to focus the company on its core business and streamline its cost structure” — was approved by the board of directors last month, according to a filing with the Securities and Exchange Commission.
The planned layoffs were first reported by Reuters.
Crain’s Detroit Business, an affiliate of Automotive News, inquired with the company for additional details.
Approval of the layoffs came a few days after the company’s public accountant Chicago-based BDO LLP resigned from the audit of its finances amid an investigation into improper equity purchasing by Electric Last Mile executives.
Co-founder Jason Luo and CEO Jim Taylor were forced out of their positions after the board discovered they purchased discounted equity in the company leading up to its public offering and failed to disclose it. Along with this revelation, the company restated its financial statements, sending its stock price into a tailspin.
Electric Last Mile shares on Tuesday got a slight boost to $2.02 following the latest news, but is still down more than 80 percent from $10.19 when it went public June 25.
The company, once valued at $1.4 billion and considered a rising star in the EV space, has a long road ahead to recover from the crash, analysts say.
The company, based in suburban Detroit, announced in September that it was launching production at its plant in Mishawaka, Ind., but production status is unclear.
