Nio (NYSE: NIO) recently implemented layoffs across various teams, offering compensation packages and reassignments to affected employees. According to a report by local tech outlet Leiphone, the layoffs primarily targeted the sales and service teams, including the UR Fellow department responsible for after-sales customer service, Nio House, and other after-sales service departments.
The layoffs, estimated to be around 10 percent, varied by region. For example, the UR Fellow team in Shanghai saw seven to eight layoffs out of a total of about 80 employees, while the UR Fellow team in Shenzhen had a higher layoff ratio of about 50 percent, with some employees reportedly joining Xiaomi’s EV unit.
These layoffs come in the wake of organizational changes aimed at cost control within Nio, with founder and CEO William Li taking a more active role in supply chain management. The introduction of a Cell Business Unit (CBU) management system is part of Nio’s efforts to strengthen cost control, with downsizing in several departments based on full-year goals.
The downsizing of the sales team began in February, coinciding with efforts to enhance corporate governance. Despite significant expansion in the first half of 2024 to prepare for the launch of Onvo’s first model, the L60, sales figures fell short of expectations. Onvo president Alan Ai, who had set ambitious sales targets for the sub-brand, has been less visible since January’s disappointing sales performance, with Onvo vice president Xia Qinghua taking on more prominent roles in internal meetings.
In addition to layoffs, Nio made changes to its flagship showroom, Nio House, eliminating the store manager position and downsizing the staff. Some operations and service staff have been replaced with part-time employees from third parties, and the staff size has been reduced.
Despite these challenges, there are positive trends in some of Nio’s businesses. The company’s battery swap stations are gradually achieving profitability, with reduced construction costs and the ability to service other brands of vehicles. Li previously mentioned improvements in the battery swap business during a live broadcast, highlighting the stations in Shanghai nearing profitability.
Overall, Nio’s recent layoffs and organizational changes reflect the company’s efforts to adapt to market challenges and streamline operations for long-term sustainability.
