Aurora stock is taking a hit on Thursday on reports that Aurora Cannabis (TSX:ACB) (NYSE:ACB) might reduce its workforce by as much as 10%.
Aurora Cannabis is one of the biggest cannabis companies, but like many other companies of its size, it has struggled for profit. Many other companies have let go of a chunk of their workforce in order to offset the costs, and it appears that Aurora Cannabis is going to choose that route as well.
Lay-Offs to Achieve Profitability
According to a report from BNN Bloomberg, an anonymous source from inside the company has revealed that Aurora is going to lay off as much as 10% of its employees. However, it is believed that the news is not going to be a secret for long.
The source revealed that the company is going to make an announcement with regards to the lay-offs in the next few days. Aurora Cannabis has a staff strength of as many as 3,400 spread across its operations in 20 countries. It is believed that many of the consultants working on a contract with Aurora are going to bear the brunt of the measure.
Aurora stock is down over 3% at C$2.72.
Following the Industry Trend
The move from Aurora Cannabis would not come as a complete surprise in the industry. Another cannabis company, Tilray (NASDAQ:TLRY,) announced this week that it is going to lay off 10% of its 1,440 employees spread across the world.
Back in 2019, companies like CannTrust Holdings (TSX:TRST) (NYSE:CTST) and HEXO Corp (TSX:HEXO) (NYSE:HEXO) had to make similar moves as well. This has become an ongoing trend in the cannabis industry. Aurora has been in trouble with regard to its finances for quite a while, and the company has had to look for new sources of capital.
In recent times, Aurora Cannabis halted construction at one of its newest properties, and that move has allowed the company to save as much as C$110 million in costs. The establishment of that facility would also have led to the creation of 650 new jobs at Aurora.
Aurora stock has lost over 70% over the past year.
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