Canopy Growth Corporation is announcing layoffs. Canada’s largest cannabis producer seeks to cut costs, including reducing the number of “dedicated team members.” Framed as “Strategic adjustments” in the Company’s press release, Canopy expects the move to save them $100 – $150 million within 18 months.
A company press release stated: “As a result of these challenging but necessary changes to the organizational structure, dedicated team members will be impacted as the Company operates with a reduced headcount moving forward. The Canopy Management team wishes to acknowledge the efforts of these individuals during their tenure and thanks them for their contributions to the Company.”
Canopy Layoffs Have Happened Before
This isn’t the first time Canopy has announced layoffs. Cutting costs by laying off employees is becoming routine. In late 2020, Canopy laid-off several hundred workers across Canada. And then again, in early 2021, Canopy announced the layoff of 75 employees at their Smith Falls headquarters.
Last year they reported a net loss of $829.3 million; this previous quarter saw that net loss shrink to $115.5 million. Canopy’s net revenue is down 8%.
The Company’s free cash flow has been negative since its inception. Free cash flow filters out all the accounting gimmicks enforced by industry and government standards. It takes into consideration operating activities and investing activities.
Hope for the Future?
Will Canopy have to announce layoffs again in the future?
“To realize profitability and power growth, we are taking critical actions to further evolve Canopy Growth into an agile organization with a clear focus on the areas where we have the greatest potential of success,” said David Klein, Canopy Growth Chief Executive Officer. “These necessary changes are being implemented to ensure the size and scale of our operations reflect current market realities and will support the long-term sustainability of our company.”