Aurora Cannabis to lay off staff, close five sites

Photo: The Canadian Press

Aurora Cannabis Inc. is making its second round of significant cuts this year as it continues with a restructuring plan meant to address profitability struggles.

The Edmonton-based cannabis company announced Tuesday that it will reduce its selling, general and administrative workforce by 25 per cent immediately and another 30 per cent of production staff will be laid off from the company over the next two quarters.

“This has not simply been a cost cutting exercise," said Michael Singer, Aurora's executive chairman and interim chief executive.

"We have undertaken a strategic realignment of our operations to protect Aurora’s position as a leader in key global cannabinoid markets, most notably Canada."

On top of layoffs, Aurora has also decided to cease some operations at five facilities — Aurora Prairie in Saskatchewan, Aurora Mountain in Alberta, Aurora Ridge in Ontario and Aurora Vie and Aurora Eau in Quebec — over the next two quarters.

Part of Aurora Vie will remain operational to allow for the manufacturing of certain higher margin items, in line with the company's decision to focus production and manufacturing at the company’s larger scale and more efficient sites.

By the end of the company's 2021 second quarter, production and manufacturing at Aurora Sky in Alberta, Aurora River in Ontario, Whistler Pemberton in British Columbia and Polaris in Alberta will be consolidated.

The company will also record production asset impairment charges of up to $60 million during its fourth quarter and a charge of up to $140 million in the carrying value of certain inventory.

Singer expects that these moves will improve gross margins and accelerate Aurora's ability to generate positive cash flow.

"We believe that we now have the right balance for the long-term success of Aurora — market leadership, financial discipline, operational excellence, and strong execution," he said.

"We remain focused on making Aurora a profitable and robust global cannabinoid company.”