Canopy Growth (NYSE:CGC) is going to slim down, at least for now, with a new round of layoffs.
On Wednesday, the company confirmed to BNN Bloomberg that it will temporarily let go of 200 employees, a move that comes only a few weeks after it said it furloughed the same number of workers due to the economic effects of the coronavirus pandemic. The company also recently laid off 85 staffers, in addition to closing down two greenhouses.
The cannabis company did not specify in which division(s) or location(s) the affected employees currently work.
While many Canadian provinces and U.S. municipalities are allowing marijuana dispensaries to sell product by classifying them as essential businesses through the pandemic, sales have lately been sluggish despite sharp increases before mandatory stay-at-home measures kicked in. And in contrast to their peers in other sectors of the economy, cannabis companies tend to be chronically unprofitable with low reserves of cash.
In a statement quoted by BNN Bloomberg, Canopy CEO David Klein said that "[a]lthough difficult, the decisions that have been made over the last few months are to allow Canopy Growth to remain focused on the areas where we are winning and ensure that we are delivering the highest quality products to our consumers in every market where we operate."
On Wednesday, Canopy Growth shares rose by 1.9%. Year to date, however, the shares have fallen twice as far as the benchmark S&P 500 index.