Cannabis firm Tilray (NASDAQ:TLRY) has confirmed it will make cuts to its workforce in an attempt to reduce costs following a grueling year for investments in the space.
The company, based out of Nanaimo, British Columbia, told media outlets on Tuesday (February 4) that a 10 percent reduction will be needed in order to reach profitability, a goal of the company.
“The tough decision to eliminate roles has not been taken lightly,” Brendan Kennedy, CEO of Tilray, said in a statement to the Financial Post. “We’re extremely grateful to our past and current employees for their contributions.”
While Tilray initially saw a jump in value during Tuesday’s trading session, finishing at a share price of US$18.15, the company had dropped to US$17.83 as of 1:28 p.m. EST on Wednesday (February 5).
Outside of this week’s news, Tilray has seen a jump in market sentiment recently thanks to the addition of a new chief operating officer in Jon Levin, an ex-Revlon (NYSE:REV) commercial executive, and a new CFO in Michael Kruteck. Kruteck previously served with privately held Pharmaca Integrative Pharmacy and Molson Coors Beverage (NYSE:TAP,TSX:TAP) before that.
The luminary hires were touted as bringing expertise that would bolster the company’s plans.
Tilray’s cuts are the latest instalment in a slew of job losses seen across the board for public cannabis companies. Lately investors have seen companies such as HEXO (NYSE:HEXO,TSX:HEXO) and CannTrust Holdings (NYSE:CTST,TSX:TRST) cut down on workforce numbers.
The company is also not the only one to roll out new leading executives this year. Firms like Sundial Growers (NASDAQ:SNDL), TerrAscend (CSE:TER,OTCQX:TRSSF) and The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) have all seen unexpected changes in their CEO positions.
Kennedy received the distinction of becoming one of the biggest winners of the cannabis boom. In 2018, Bloomberg awarded the Tilray CEO the second spot on its highest-paid CEO list.
He was right behind Elon Musk, CEO of Tesla (NASDAQ:TSLA), on the top five list, which also included Bob Iger, CEO and chairman of Walt Disney (NYSE:DIS); Tim Cook, CEO of Apple (NASDAQ:AAPL); and Nikesh Arora, CEO and chairman of Palo Alto Networks (NYSE:PANW).
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.