Cannabis Aurora (ACB) – Get report Shares rose Tuesday when the marijuana company announced it would lay off about 700 workers, close five production facilities and charge $ 60 million for the quarter ending June 30.
Regarding the layoffs, Aurora said in a statement that there will be “an approximate 25% reduction in Aurora’s general and administrative expenses [selling, general and administrative] staff, most with immediate effect, and an approximate 30% reduction in production staff over the next two quarters. “
It means about 700 workers, the company said.
Regarding plant closings, “Aurora has initiated a plan to close operations at five facilities over the next two quarters to focus production and manufacturing at the company’s largest and most efficient sites,” the company said.
“In connection with the established facility rationalization, Aurora expects to record impairment charges on production assets of up to $ 60 million during the fourth quarter of 2020. The company also expects to record a charge of up to $ 140 million on the carrying amount of some inventory, “he added. .
CEO Michael Singer said the restructuring not only equates to “cost cutting” but was more of a “strategic realignment.”
In a comment last month, Cowen analyst Vivien Azer said the company “is off to a solid start.” But “cost overruns and missed targets have resulted in noticeable management turnover and the need to refinance debt with strict mandates around profitability,” he said.
Aurora Cannabis recently traded at $ 14.04, an increase of 2.34%. The stock has fallen 84% over the past year, but has recovered 60% in the past three months.