Shares of ChargePoint Holdings (NYSE:CHPT) are trending down more than 3% in early trading Thursday morning after the EV charging solutions company announced a strategic reorganization, which includes a12% reduction in the company’s global workforce.
The restructuring initiative, designed to enhance financial performance and pave the way for sustained long-term growth, is anticipated to result in around $14 million in restructuring charges. This comprises approximately $10 million in severance and related expenses, along with about $4 million in facility-related costs.
However, ChargePoint expects the action to result in annual operating expense savings of approximately $33 million.
“As part of a comprehensive business evaluation in my new position as CEO, today we have taken the difficult decision to reorganize our global workforce,” said CEO Rick Wilmer.
Analysts viewed the announcement as “modestly positive”, reiterating their Hold rating on company shares with a $3 price target.
“After a thorough review of our business strategy and product roadmap, we are heightening our focus on execution, operational excellence, and improved efficiencies while we continue with our industry-leading innovation.” Added Wilmer.
Stifel currently expects that non-GAAP operating expenses will decrease to approximately $78 million in the fourth quarter of FY24, compared to $81 million in the third quarter of FY24 and $85 million in the first quarter of FY24.
Shares of CHPT are down 3.35% in mid-day trading on Thursday.