Shares of ChargePoint Holdings (CHPT 0.79%) were down 9.9% this week as of Thursday's close, according to data provided by S&P Global Market Intelligence, after the company announced a significant reorganization.
ChargePoint's new CEO is taking the initiative
ChargePoint stock only just rallied 26% in December 2023, rebounding from a disastrous November after the electric vehicle charging network provider abruptly lost both its CEO and chief financial officer.
In a press release on Wednesday morning, the newly appointed CEO, Rick Wilmer, explained that the company is implementing a strategic reorganization as a result of a "comprehensive business evaluation" in his new position.
Wilmer said, "After a thorough review of our business strategy and product road map, we are heightening our focus on execution, operational excellence, and improved efficiencies while we continue with our industry-leading innovation."
What's next for ChargePoint investors?
The reorganization will include a roughly 12% reduction of ChargePoint's global workforce and lead to roughly $14 million in restructuring charges (including $10 million in severance expenses and $4 million in facility-related costs). But over the longer term, it should reduce annual operating expenses by roughly $33 million while seeking to position the company for long-term sustainable growth.
ChargePoint didn't provide much in the way of additional elaboration, but did say Wilmer will discuss more components of the plan during its fiscal fourth-quarter 2024 investor call set for March. The company also reiterated its commitment to achieving positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the fourth quarter of calendar-year 2024.
Until then, given the absence of more details surrounding exactly how ChargePoint aims to shift its direction to achieve its goals, it's no surprise to see some short-term traders taking their recent profits off the table.
