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EV startup Vinfast to cut U.S. jobs amid restructuring

Published Feb 06, 2023 08:08AM ET Updated Feb 06, 2023 09:52AM ET
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© Reuters. FILE PHOTO: A VinFast video is screened during the press day at the Los Angeles Auto Show in Los Angeles, California, U.S. November 17, 2022. REUTERS/Mike Blake

By Phuong Nguyen

(Reuters) -Vietnamese electric vehicle maker VinFast is cutting its workforce in the United States, the company said on Monday, amid a restructuring in its major overseas market as the startup grapples with a stalled shipment of its first cars and prepares for a potential stock listing.

The Vietnamese company, a subsidiary of conglomerate Vingroup JSC, has been moving to expand in the United States, where it hopes to compete with existing automakers.

    A VinFast spokesperson said headcount would not shrink in Vietnam where most of the company's staff, including its factory and engineering operations, are located.

    It was not immediately clear how many jobs would be affected by the U.S. restructuring.

VinFast said it had hired about 150 people in the United States, many in sales, support and distribution roles as part of a model that bypasses traditional dealerships.

    The company, which started operations in 2019, said last week that it would delay its first batch of deliveries to the United States to the second half of February.

    In late January, VinFast said it was merging its U.S. and Canadian operations into a single business unit. It did not announce any job cuts at the time.

VinFast said in a statement to Reuters it was looking to "streamline" North American operations and would work with third-parties to "increase the quality and speed of customer service."

VinFast managers had been told to prepare lists that could cut up to 30% of staff in headquarters operations in Vietnam for review by the company's founder and chairman, Pham Nhat Vuong, on Monday, two people with knowledge of those discussions said.

VinFast said there would be no net workforce reduction in Vietnam. "We review employee's quality of work frequently and dismiss those who do not meet our requirements," it said. "We will recruit new replacements."

OVERSEAS PLANS

The company had shipped its first batch of 999 of the electric vehicles to the United States in November and had targeted the first delivery of those VF8 sport utility vehicles in December.

But the vehicles have been held at a port on the U.S. West Coast while the company works on software updates, it has said.

VinFast has expanded staffing over the past several years as it targets growth in the market for EVs in Europe and North America.

The company is waiting for regulatory approval to begin construction of a $4-billion vehicle assembly plant in North Carolina. The company had initially targeted a start of production there next year.

It said in December it had filed for an initial public offering (IPO) to list on the Nasdaq under the ticker symbol “VFS” to fund its expansion.

VinFast is looking to compete with established carmakers at a time when major automakers, led by Tesla (NASDAQ:TSLA), are driving prices down and looking to take advantage of new tax credits for qualifying models in the United States.

VinFast vehicles are not eligible for the $7,500 tax credit in the United States because they are not built in North America.

EV startup Vinfast to cut U.S. jobs amid restructuring
 

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