Lithium Miner Albemarle Cuts Costs and Plans Layoffs as EV Demand and Lithium Prices Fall
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Key Takeaways
Lithium miner Albemarle plans to slash costs and lay off workers as the slump in EV demand and tumbling lithium prices hurt sales and profits.
The company said it will lower capital expenditures and optimize its cost structure.
Albemarle said the moves were being made because of changes in market conditions.
Shares of Albemarle (
ALB
) lost ground Wednesday as the biggest lithium producer announced it was cutting costs and jobs, as well as taking other measures to save money because of “changing end-market conditions.”
Albemarle has been hurt by slowing demand for electric vehicles (EVs), which use batteries made with the metal, and plunging lithium prices.
The company said it would lower 2024
capital expenditures
to $1.6 billion to $1.8 billion, down from $2.1 billion last year. It explained that the change “reflects a re-phasing of larger projects in the near term to focus on those that are significantly progressed, near completion and in startup.”
Albemarle also plans to take actions to “optimize” its cost structure as it looks to slash expenses by $95 million per year. The reductions would primarily be related to
sales, general, and administrative costs
, including layoffs and less spending on contracted services.
CEO Kent Masters explained that the steps “allow us to advance near-term growth and preserve future opportunities as we navigate the dynamics of our key end-markets.”
The company didn’t indicate how many employees would be let go. It added that it would be taking a charge in the current quarter, mostly for costs for severance and benefits, exit and disposal activities, and asset write-downs.
In November, Albemarle lowered its full-year profit and sales
guidance
, pointing to declining lithium prices.
Albemarle shares were down 1.6% at $123.96 per share as of about 11:20 a.m. ET Wednesday. They have lost about half their value over the past year.
