Jiyue, a premium electric vehicle (EV) maker backed by Chinese search-engine firm Baidu, will downsize its operations while pursuing fresh capital to withstand vicious competition.
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Projects that do not improve the company’s financial health will be scrapped, and some business units will be merged to avoid redundancy of human resources, the Shanghai-based carmaker said in a statement on Wednesday.
“We will make all-out efforts to focus on our goals to improve efficiency in operation and management,” the statement said. “All measures will be taken to adapt to the new situations amid the rebirth of the company.”
The statement came after speculation on social media in mainland China that Jiyue had edged closer to liquidation due to poor sales in the world’s largest EV market, which is crowded with more than 50 major players.
In a letter to employees on Wednesday, CEO Xia Yiping admitted that the company was under pressure to stay afloat, and said that a drastic revamp of existing operating units would be pivotal to Jiyue’s fate.
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“The management will do its best to overcome difficulties,” he said in the letter seen by the Post. “The restructuring plan has received full understanding and full support from the shareholders.”
The CEO did not elaborate on which business units would cease or how many employees would be affected.