In the newest wrinkle in Li-Cycle’s recent ups and downs, the Toronto-based company has laid off 17% of its work force, including three senior executives, following a construction pause at its new facility in Rochester, New York.
“We are recalibrating our organizational structure to better align with the more focused priorities of Li-Cycle,” President and CEO Ajay Kochhar said in a March 26 release. “We believe that a centralized model, and the consolidation of our operational and commercial teams, will increase efficiencies and facilitate cross-functional partnerships to enhance our planning process and ability to execute on our short- and long-term objectives.”
Until last October, one of those objectives was the completion of a large recycling hub in Rochester, central to its “hub-and-spoke” process, and meant to give the company a competitive edge in a burgeoning industry. But then the company halted the plan amid inflation and high construction costs, “rattling” stakeholders and onlookers amid concerns about the company’s viability, wrote the Globe and Mail’s Adam Radwanski.
Li-Cycle says it is still reviewing options to continue developing the Rochester facility and evaluating more funding opportunities after a recent $75-million cash-infusion from mining giant Glencore, a repeat investor.
But the job cuts are “a tacit acknowledgement” that Li-Cycle’s rapid growth was unsustainable, reports Reuters. The company had been working to expand its model across North America and Europe, and in 2023 it secured a conditional US$375-million loan from the United States Department of Energy. But cost estimates have since nearly doubled to $960 million.
In the announced cuts, 60 employees will be laid off, with the majority of the company’s $8.3-million restructuring charge allocated to severance payments. Li-Cycle will retain about 200 employees, and the layoffs will save about $10 million in payroll and benefits costs per year.
In a senior-level reshuffle, Asia-Pacific regional president Dawei Li will become Li-Cycle’s chief commercial officer and Conor Spollen, senior vice-president of projects delivery, will be chief operating officer.
Executive chair and co-founder Tim Johnston—who up to now had essentially run the company alongside Kochhar—will be stepping back from his management role and serve as interim non-executive chair, Reuters reports. Li-Cycle expects a new chair will be appointed at the company’s May, 2024 Annual General Meeting.
Chief Financial Officer Debbie Simpson, and Richard Storrie, regional president for Europe, Middle East and Africa, will leave their roles May 31, the release states.
