Chinese electric vehicle maker NIO recently revealed plans to reduce its workforce by approximately 10% as part of broader organizational optimization efforts, cutbacks were outlined in an internal memo from NIO founder and CEO William Li.
The memo, titled “Organizational Optimization and Two-Year Priorities,” acknowledged that NIO will soon undertake adjustments involving structural changes and resource allocation. William stated the goal is boosting organizational efficiency by eliminating redundant roles and ineffective workflows.
Specifically, the optimization will focus on merging overlapping departments, transforming inefficient divisions, and cutting non-essential positions. Resources will be concentrated on core long-term technology investments, sales expansion, and upcoming vehicle launches.
Projects unlikely to improve NIO’s finances within the next three years will receive reduced or delayed funding. According to William, these measures will enhance NIO’s overall financial health, personnel efficiency, and enterprise competitiveness.
Following the memo, sources claimed NIO planned to cut 10-20% of roles across multiple departments. One employee later verified being impacted by layoffs at NIO’s Anhui subsidiary. However, the exact number and scope of reductions remains unconfirmed.
Reports of NIO job cuts first surfaced in late October amid rumors of a hiring freeze, at the time, one employee downplayed the speculation, saying their autonomous driving division was unaffected. Another speculated it could involve consolidating certain teams rather than company-wide layoffs.
The need for reorganization comes despite NIO’s strong growth trajectory so far, delivered over 16,000 vehicles in October, up 60% year-over-year, for the first 10 months, deliveries exceeded 122,000 units. In 2023 NIO launches all new NIO ES6 and ES8, ET5 Touring start globally delivered with Europe and China.
But NIO faces rising competition in China’s increasingly crowded EV space, like XPeng and Li Auto are rapidly gaining ground while targeting the same mid-to-high end demographic.
Against this backdrop, NIO is focused on ramping up production capacity and managing expenses. NIO aims to launch new vehicle models and build its lower-cost sub-brand targeting mainstream consumers. Operational streamlining will help fund these ambitious growth plans.
Workforce reductions are never easy, but NIO’s proposed 10% cut appears relatively modest given the company’s lofty goals, with smart optimization, NIO can direct resources to its most critical technology and expansion initiatives, while near-term job impacts are unfortunate, the ultimate aim is sustaining NIO’s upward momentum.