Benzinga - by Shanthi Rexaline, Benzinga Editor.
Shares of Chinese electric vehicle startup Nio, Inc. (NYSE:NIO) weathered the weakness relayed by stock futures, on Friday and moved higher in premarket.
The positive sentiment came on the back of a Bloomberg report that said an internal letter signed by CEO William Li it had privy to, revealed plans to cut 10% of jobs in November, with “duplicate” and “inefficient” jobs likely to be impacted.
Project investment that won't contribute to the company's financial performance within three years will be deferred or cut, Li reportedly said in the letter.
“This is a tough but necessary decision against fierce competition," Li said. “Our journey is a marathon on a muddy track.”
Nio is a seller of premium EVs and the company is facing the heat of a brutal domestic market, where mushrooming competition and aggressive price cuts have rendered the going tough for small startups.
Commenting on the report, Tesla CEO Elon Musk said, “Sounds like they are having tough times.” Tesla, which has a solid presence in China, was the perpetrator as it set in motion an aggressive price war in the domestic market.
The positive reaction from investors reflected hopes the company’s right-sizing and efficiency-boosting measures will likely provide liquidity to survive during the tough times.
In premarket trading, Nio rose 2.82% to $8.01, according to Benzinga Pro data
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.