- Canoo is furloughing nearly a quarter of the workers it has left
- The startup says that this is a temporary but necessary move so it can grow
- Its future remains rocky and uncertain
Canoo, that boxy little EV startup with big ambitions, is in trouble. Despite futuristic vehicle designs and government contracts at its doorstep, the automaker hasn't been having great luck gaining traction. And its latest actions show that the struggling upstart might be struggling to keep the lights on.
The company announced that it is officially furloughing around 30 workers for at least 12 weeks—I know that number doesn't sound like much, but it's nearly a quarter of Canoo's workforce, which has withered from the 800 people employed in 2021.
"I don't see them lasting maybe until the end of next year," said one furloughed employee who spoke with local news under the condition of anonymity. The worker was just one of the individuals who won't be paid for the next 12 weeks and loses health insurance at the end of November.
Canoo justified its furlough as part of its move to Justin, Texas—which was quietly announced via a filing with the U.S. Securities and Exchange Commission back in August—noting that the temporary reduction in its workforce was necessary to prepare the automaker for its next phase of growth. Just a year ago, the company boasted to local officials that it planned to bring 1,300 jobs to Oklahoma assembling vehicles.
Here's Canoo's official statement to local news:
Canoo has made the difficult decision to temporarily reduce our workforce in Oklahoma City by furloughing 23% of our factory workers for a period of twelve weeks as part of a broader realignment of our North American operations. This reduction is a continuation of our efforts to consolidate our U.S. workforce which includes redistributing some of our tenured and skilled employees to our Oklahoma City and Texas facilities as part of our comprehensive plan and supply chain harmonization to prepare the company for the next phase of growth. We are committed to supporting our 30 impacted workers in Oklahoma City during this challenging time and will provide the necessary resources to assist them.
Canoo isn't exactly in the best spot for growth right now. Its furloughs signal that higher-ups figure that the company is somewhere in between "let's save some cash" and "we're in a bind." It sold just 22 vehicles in 2023 and has only around $4.5 million in cash and cash equivalents to its name. This is despite its government contracts with the Department of Defense, NASA, the U.S. Postal Service, and the State of Oklahoma.
The only way Canoo can dig itself out of its hole is to sell more vehicles or raise some capital. But with its stock falling from a high of $400 in December 2020 to just $0.40 at the time of writing, it's unlikely that many investors will want to take the chance in a company that isn't quite circling the drain, but is looking over the edge of the sink. Plus, it's been on the Wall Street Journal's EV startup death watch for almost a year.
Canoo's difficulties aren't unique for a new car company. Building a vehicle is hard, but scaling up is even harder. If it were easy, every company who tried would succeed. But Canoo's boat has been full of holes that have only been taking on water. Perhaps one of the most ill-timed pivot's was Canoo's decision to forego a futuristic people hauler to instead focus on the commercial market. Folks were excited to have something different on the road—I mean, just look at the attention that the Cybertruck got (at least at first). Here's a look at what could have been.
The road ahead? Bumpy at best, or water-logged if things don't turn around quickly. This entire mess has left Canoo up a creek without a paddle, and unless the automaker gets back in gear (and quickly), it could go the way of Fisker before we know it.
