Fisker Woes Continue as 75% of Workforce is Laid Off, Leading to Federal Lawsuit
The turbulent downward spiral that Fisker Automotive finds itself in continued this week as the automaker laid off three-quarters of its workforce, prompting a federal lawsuit filed by the departed employees.
On Friday, Fisker announced that its entire public relations team and others that account for 160 out of 210 total employees would be laid off at 8:00 AM that morning. The layoffs are the latest chapter in the beleaguered Fisker’s story, which began drawing public interest when co-founder and company namesake Henrik Fisker announced his departure on March 13, citing differences in opinion with management regarding business strategy. Then, Chinese automobile manufacturer Geely withdrew its bid to take over the company, leaving only the state-run Chinese conglomerate Dongfeng as a possible buyer. All of Fisker’s employees were furloughed for one week beginning March 25, and Fisker sought possible bankruptcy council by the law firm Kirkland & Ellis around the same time. The week ended with Dongfeng also withdrawing its bid for Fisker.
Only one day after the layoffs were announced, a lawsuit was filed by Outten & Golden LLP, with ex-Fisker employee Sven Etzelsberger named as plaintiff (the suit also seeks to be a class action lawsuit). The suit alleges that Fisker is in violation of the US Worker Adjustment Retraining Notification Act, which requires employers to give affected workers a 60-day notification in mass layoff situations. According to the suit, Fisker has also not given the affected former employees any sort of severance package that would cover lost wages during that 60 days. Automotive News admits that there are three exceptions to the 60-day rule, including being a faltering company, experiencing unforeseeable business circumstances, or being severely affected by a natural disaster.
Automotive News also reports that the remaining employees are made of executives and senior managers that will guide Fisker through its immediate future. Fisker may still sell off portions of its intellectual property if no other firms offer to buy the company. Fisker is due to repay part of its loan from the Department of Energy at the end of this month.