Aurora Cannabis announced it is laying off 12% of its workforce as the company reorganizes.
A spokesperson said, “Today we delivered against that commitment as we announce a corporate reorganization that will allow Aurora to operate as a leaner, more agile, and future-focused company, fit for success in the evolving global cannabis industry.”
Aurora is embarking on a $90 million cost savings project.
Aurora Cannabis is laying off 12% of its workforce
The Edmonton-based company confirmed the layoffs to The Canadian Press. They did not provide details.
The cuts are part of an effort to streamline Aurora into a profitable company.
Spokesperson Kate Hillyar said the company identified cost savings in their third-quarter earnings as the key to profitability. Aurora Cannabisannounced net losses of $1 billion in its third quarter.
The company’s third-quarter financial and operational results saw a 17% sequential decrease in revenue to $50.4 million.
“If you take a look at the top players in Canada, take a look at where their stock prices are compared to where their all-time highs were, and we’re taking a look at losses 99 cents on the dollar,” says Nawan Butt, Portfolio Manager at Purpose Investments. “It’s all to the determent of the equity holder for the LPs. And I’m surprised more equity holders aren’t appalled at some of the decisions management have taken.”
Bad Year for Aurora
Aurora Cannabis laying off 12% of its workforce isn’t the only bad news. Earlier this year, they announced the closure of three greenhouses. One of these places is Aurora Sky in Edmonton, employing 13 percent of the workforce.
Initially hyped as a pioneer in cannabis growing technology, Aurora Sky is now closing. If this doesn’t demonstrate the bursting Canadian cannabis bubble, then what does?
Still, some might say Aurora is reaping what they sowed when they speculated. When they gleefully watched the Canadian cannabis stock prices climb to nonsensical proportions. They once claimed they’d supply a third of the country with its cannabis. They bought up every small niche company in sight. Built more greenhouses while the legacy market was in a supply glut.
All to the determent of the equity holders. The company was never selling cannabis, according to one anonymous insider. “They were always just selling equity.”
Now Aurora Cannabis is finding that it must start selling cannabis people are willing to buy.