Chinese language electrical carmaker Nio plans to chop 10% of its workforce amid “fierce competitors,” CEO William Li mentioned Friday.

The job cuts will probably be accomplished by November.

“The approaching two years will witness probably the most intense competitors in the course of the transformation of the automotive trade in an setting filled with uncertainty,” Li advised workers in a letter seen by CNBC. 

He added that Nio has been analyzing its two-year working plan over the previous two months, and that over the past two weeks, the corporate “recognized the enterprise priorities and developed an in depth plan for organizational and enterprise optimization.”

The corporate is specializing in investing in tech, reducing tasks that do not contribute to the monetary efficiency in three years and guaranteeing the Nio’s core merchandise are launched on time, Li mentioned.

“I am sorry to colleagues who could also be impacted by the changes. This can be a powerful however vital determination in opposition to the fierce competitors.”

Like many Chinese language electrical car startups, Nio has been hit by weak shopper sentiment on this planet’s second-largest economic system, stiff competitors and a value struggle kicked off by Elon Musk’s Tesla. 

Musk’s automaker started reducing the costs of its vehicles in China final yr to stoke demand, forcing rivals to do the identical. Nio first resisted any value declines, however in the end carried one out in June.

Xpeng, one other Chinese language EV startup, has restructured its operations, together with reducing jobs. 

Whereas nonetheless loss-making, Nio has managed to quickly develop its car deliveries. It mentioned it delivered 16,074 vehicles in October, up barely on the prior month and 60% larger than the identical interval final yr.

Li penned a rallying cry on the finish of his letter to workers. “Our journey is a marathon on a muddy observe. Please keep targeted on environment friendly execution and enchancment of system capabilities. Energy up.”