Electric car venture set to slash Israel workforce by another 40%, mostly from development and infrastructure departments ahead of launch of sales activity. Company lost $132 million in H1 2012
Golan Hazani, Calcalist
Published: 10.28.12
Better Place will dismiss 150 to 200 of its 400 employees in Israel this week, Calcalist has learned.
The move is led by new CEO Evan Thornley. The layoff will slash Better Places’ workforce in Israel by 30%-40%, mostly from its R&D and infrastructure divisions after the company has completed the development of most of its infrastructure.
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The imminent layoffs were first reported by Calcalist on November 9, when Better Place asked investors for an immediate $130 million cash injection.
The layoffs come on the backdrop of the company’s streamlining operations and the completion of its infrastructure and development operations, ahead of the commencement of its sales operations.
Aside from the 400 workers currently employed by Better Place Israel, the company has some 100 employees in Denmark, Australia and the Netherlands.
Earlier this month, the company’s board voted to replace Shai Agassi, the founder and CEO of Better Place International, with head of the company’s Australia operations, Evan Thornley.
Agassi’s name has become synonymous with the company as the person who came up with the idea, and he was basically the company’s sole presenter and charted the company’s activity in the past five years.
Agassi was ousted on the backdrop of the company’s accelerated losses. In the first half of 2012 alone, Better Place lost $132 million. Calcalist reported that the company had just enough cash to last several weeks.
Estimates are that the layoff round is preliminary and another is expected in the near future as the company is approaching a decision about its future activities. It will likely announce its cooperation with Israel Corporation’s Chinese electric car manufacturer, Qoros.
Better Place hit a financial crunch due to its accelerated use of cash in the third quarter of 2012. At the end of the second quarter, the company had $131 million in cash and cash equivalents, and had requested investors – mainly Israel Corporation (28.2%) and controlling shareholder Idan Ofer– to inject the company with $131 million after it had invested $229 million thus far.
Financing efforts are currently underway.
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