The CEO of cannabis giant Aurora just stepped down and the company is cutting 500 jobs as turmoil hits the industry

Jeremy Berke

Feb 7, 2020, 04:22 IST

The CEO of cannabis giant Aurora just stepped down and the company is cutting 500 jobs as turmoil hits the industry

Aurora Cannabis CEO Terry Booth is stepping down from his role and the company is cutting 500 jobs in an effort to reduce costs.
Aurora is the latest cannabis company to get hit with executives shakeups and layoffs.
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Longtime Aurora Cannabis CEO Terry Booth is stepping down and the cannabis giant is cutting 500 jobs to slash spending, as turmoil hits the industry.

Michael Singer, Aurora's executive chairman, will take over as interim CEO while the board searches for a full-time replacement, the company said in a statement

Booth isn't the only Aurora executive to depart the company in recent months. In December, Cam Battley, Aurora's chief corporate officer and the company's most public figure, stepped down from his role.

On top of the executive changes, Aurora said it was eliminating 500 full-time roles at the company, including 25% of corporate positions, and cutting back spending on travel and entertainment, IT projects, sales and marketing initiatives, and other areas.

"This was an incredibly difficult decision and not one taken lightly," Aurora CFO Glen Ibbott said on a Thursday afternoon call with analysts and investors.

Shares of the company tumbled 11% in late trading on Thursday.

The layoffs were first reported by BNN Bloomberg on Wednesday.

Aurora will also take a $740 million to $775 million goodwill write-down, mainly related to assets the company acquired in Denmark and South America, "given market current cannabis market conditions and the slower than expected near-term industry growth," according to the statement.

Cannabis companies face executive shake-ups, layoffs, and other cost-cutting measures

Other Canadian cannabis giants have announced cost-cutting layoffs in recent weeks. Tilray on Tuesday let go of 10% of its workforce. amounting to approximately 144 jobs.

"Tilray restructured its global organization to meet the needs of the current industry environment and for continued growth in 2020 and beyond," Tilray CEO Brendan Kennedy said in a statement provided to Business Insider.

Canopy Growth founder Bruce Linton stepped down from his role in July of last year. He was replaced by David Klein, a former senior exec at Canopy's largest investor, Constellation Brands.

NASDAQ-listed Sundial Growers shook up its executive team in January as well, replacing longtime CEO Torsten Kuenzlen and laying off an undisclosed number of employees.

"We have implemented several streamlining and efficiency initiatives to position the Company for long-term, sustainable growth. These initiatives include workforce optimization, along with enhancement of facility workflows and processes, realignment of product lines and product formats to areas of stronger demand and a heightened discipline in cost management," a Sundial spokesperson said in a statement provided to Business Insider.

And on Tuesday, Canadian cannabis cultivator WeedMD replaced its CEO, Keith Merker, with Angelo Tsebelis, the company's present.

On the US side, MedMen's co-founder and CEO Adam Bierman stepped down from his role and surrendered his super-voting shares in January, after the company laid off over 200 employees and was hit with a litany of lawsuits, executive departures, asset sales, and corporate controversies.

Analysts welcomed the executive shakeups and job cuts at Aurora and Tilray.

"From a financial standpoint, we're supportive of these moves," Jefferies analysts Owen Bennett and Ryan Tomkins wrote on Wednesday. "Both companies have a relatively clouded path to profitability right now, very large operational footprints, a history of aggressive investments, and will likely need to raise capital in the near future (in our view)."

Cowen analyst Vivien Azer called the cuts "prudent" in a note on Wednesday.

"With cash scarce and profits elusive, we find these cuts prudent," Azer wrote.