Organigram cuts 220 jobs as corporate cannabis continues to struggle in the era of COVID-19
Organigram Holdings became the latest casualty of the COVID-19 pandemic in the cannabis industry, announcing on Friday that the company would lay off 220 employees, a workforce reduction of 25 percent. In a statement, the company said it would move forward with what it called a “leaner, cross-functional workforce” with 433 employees now operating out of its indoor production facility in Moncton, New Brunswick. Overall, Organigram now has 609 employees in total.
"These decisions are never easy to make, but we are committed to ensuring the Company is appropriately sized relative to market conditions,” said Organigram CEO Greg Engel in a statement. “We are incredibly grateful for the commitment that our affected employees have made in helping build the Company that Organigram is today."
With the layoffs comes news of a reduction in production capacity as well, as the company also announced it would cultivate less cannabis at its Moncton facility for what it calls “the foreseeable future.” The company hopes to broaden the quality of its products during this time, bringing on new cultivars and increasing the tetrahydrocannabinol ("THC") and terpene profile of its dried flower. According to a statement, this will all be done to meet customer demand.
“Throughout the COVID-19 pandemic, Organigram has remained focused on proactive strategies to protect the health and safety of its workers both inside and outside of its production facility as a priority, while also focusing on maintaining the continuity of its business,” Engel continued. “With a reduced workforce, the Company believes it can continue to meet current and anticipated near term demand levels.”
Organigram becomes just the latest cannabis company to decimate its workforce in the age of coronavirus. In April, as quarantines forced the global economy into a tailspin, Canopy Growth laid off 200 employees. Last week, Aurora Cannabis gave 700 employees their pink slips and shuttered five production facilities.
The Organigram cuts follow recent moves by the company to keep itself from hitting dire financial straits. Last month they raised $49 million in additional capital after completing its at-the-market program. A month earlier, the company restructured its debt deal with the Bank of Montreal.
Right now, Organigram plans to put off its Q3 Interim filings until July 21 but expects to report a decline in net revenue for the quarter.