Struggling Canadian producer The Green Organic Dutchman Holdings Ltd. (TSX: TGOD) is issuing a series of aggressive cutbacks in an attempt to weather the current economic storm.
The cost-cutting moves include suspending its Quebec operations, laying off staff and reducing pay for salary and executive staff.
The coronavirus pandemic has exasperated existing financial problems for TGOD, who posted losses of $195.75 million for the 2019 fiscal year in a report released in March.
In a statement issued on Wednesday, TGOD said it’s halting cultivation operations at its Valleyfield facility in Quebec and temporary laying off the staff who work there. The company said it plans to restart operations later this year.
According to BNN Bloomberg, the layoffs affect 30 people. The company said it now employs 160 staff in Canada and 100 people in Poland.
For now, TGOD says it’s consolidating production at its Ancaster, Ont., location where it can “produce larger volumes than initially anticipated.” The changes will not impact next month’s launch of a new round of cannabis 2.0 products, the company said.
With the stated goals of generating positive EBITDA and operating cash flow later this year, TGOD announced further cost-cutting measures of temporary salary reductions of 20 per cent for salaried employees and 30 per cent for “certain” executives; a freeze on all non-essential recruitment and consultancy work; and working with suppliers to identify further cost savings and efficiencies.
CEO Brian Athaide said the COVID-19 pandemic and other factors are demanding extreme forward-looking measures to manage its cost structure.
“These are unprecedented times, and the situation continues to evolve,” he said. “With the support and unity I have seen from our employees, partners and stakeholders, I am very confident that TGOD can tackle this challenge and come out much stronger.”