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In a statement to Yahoo Finance Canada, the Smith’s Falls, Ont.-based cannabis producer said the layoffs follow separate announcements on March 4 and April 16 in which the company shut down cultivation facilities and reduced its headcount.
“Although 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,” chief executive officer David Klein said in an emailed statement.
He said more information about his “new vision” for the company will be revealed when Canopy reports its latest quarterly earnings on May 29.
Klein took the top job at the world’s largest cannabis producer in January, leaving behind his CFO role at Constellation Brands (STZ-B)(STZ), the U.S. beer and wine giant that invested $5 billion in Canopy in 2018. His predecessor Mark Zekulin served for years as co-CEO with Bruce Linton, who was ousted last July, shortly after Constellation management said they were “not pleased” with the cannabis producer’s financial performance.
Shares rallied in December when Canopy announced Klein would replace Zekulin, who made it clear he was serving as sole CEO on an interim basis after Linton’s departure. Investors saw the appointment of a consumer packaged goods veteran as a sign Canopy was shifting focus from rapid growth to better management of existing operations.
“For a long time Canopy has prioritized doing things first, but going forward we’ll be focused on doing things the best in the markets and in the product formats that show the greatest promise,” he added.
The termination of 200 jobs in unspecified branches of the company comes on the heels of plans announced earlier this month to shut down a Saskatchewan facility, stop hemp cultivation in New York and cannabis cultivation in Colombia, and exit operations in Africa. The company said it expects to book an impairment charge of between $700 million and $800 million as a result of those changes in its upcoming financial results.
Canopy also recently announced 200 retail employees would be temporarily laid off due to the COVID-19 pandemic. In March, it closed two large cultivation facilities in British Columbia, resulting in 500 lost jobs.
“The industry has evolved and we need to focus on specific markets where we have the legitimate right to win,” Klein said in February. “We're prepared to take initial steps to right-size our business over the next 90 days.”
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.