California-headquartered hybrid sports car maker, Fisker Automotive has started downsizing its labour force by up to 75%, in an effort to keep its operations going.
The company said that the move was necessary to maximise the value of its core assets.
Nonetheless, it has maintained its senior managers and executives on board to oversee the financials.
The job cut, however, triggered a class suit action from terminated employees, accusing the company of violating the Worker Adjustment and Retraining Notification or WARN Act that requires 60 days’ notice for mass layoffs.
Fisker, which previously hired a bankruptcy law firm to assess the firm’s options while it seeks investors, has not commented on an option for possible bankruptcy restructuring.
The cash-strapped firm, which raised US$1.2 billion from investors and close to US$200 million in government loans, also planned to refurbish an old General Motors plant in Wilmington to build a less-expensive model, called Atlantic. The firm has sought for investments to help finish the production of the Atlantic.
Production of its flagship vehicle, the US$103,000 Karma plug-in hybrid has not been smooth sailing.
The company discontinued production of the Karma plug-in hybrid late last year when battery supplier, A123 Systems filed for bankruptcy protection, and since has sold most of its assets to Chinese auto parts supplier Wanxiang Group.
Fisker also recalled about thrice its Karma luxury sedan, made by contract assembler Valmet Automotive in Finland.