Cash crunch may lead to layoffs at Better Place
Firm says layoffs could affect as many as half of the firm's worksforce - some 400 to 450 employees in Israel.
Following Shai Agassi's unexpected resignation last week as CEO of Better Place, officials of the electric car infrastructure company said Wednesday the firm could soon face layoffs of as many as half its workforce, thought to number 400 to 450 in Israel.
At a Tel Aviv news conference, the company's new CEO, Evan Thornley, and CEO of Better Place's Israeli operations, Moshe Kaplinsky, expressed confidence that shareholders would come through with additional funds.
Better Place's staff views the future of their company, which is building electric car infrastructure in Israel, Denmark and Australia, with deep concern in light of the major financial problems it has been facing, which are so severe as to call the continued existence of the company into question.
In a statement, Better Place said the company was assessing its current situation but no decisions have been made.
Thornley told the news conference: "I'm focused on building the strongest team possible. The caliber of our global team is incredible and I want to continue to build our talent base."
Formerly head of Better Place's Australian operations, Thornley also took the Israeli media to task for the way it covered Agassi's departure from the company.
Most of the company's workforce is based in Israel, although it also has employees in Australia, Denmark and the Netherlands. The firm's Israeli-based development division of 100 to 150 employees is expected to bear the brunt of the layoffs, as the technology that Better Place has adopted for its station network, through which motorists can quickly swap their car battery, has been completed, although the method has been the subject of some controversy.
After anticipated development team layoffs, dismissals are expected among the staff in charge of the network of battery changing stations. The plans for the Israeli network call for 45 stations, 38 of which have already been built.
The company is thought to have burned through cash at a stepped-up pace in the third quarter of this year. It lost $132 million in the first half of the year alone and has had a $104 million negative cash flow since January 1.
Due to the cash crunch, Better Place sought a 200 million euro injection from institutional investors, but when that failed, it turned to its existing shareholders, including the Israel Corporation, in a bid for $150 million.
Agassi announced on Tuesday that he was also leaving the board of Better Place. He was to remain a director of the company, accorinding to the orignal terms of his departure.
Thornley said at the news conference that every company makes mistakes at the beginning in doing something new, and when complications are encountered, it is necessary to evaluate the situation and draw the appropriate conclusions.
Agassi announced this week that he was also leaving the board of Better Place, a firm he founded in 2007.