Wolfspeed’s Leadership Shakeup Amid Slowing EV Demand
CEO Gregg Lowe Ousted Without Cause
In a surprise move, Wolfspeed’s board of directors has ousted CEO Gregg Lowe without cause, effective immediately. This decision comes as the company faces significant headwinds, including slowing demand for electric vehicles (EVs) and manufacturing issues at its factory, which is slated for closure.
Challenges Mounting
The Durham, North Carolina-based chipmaker has been struggling to overcome various obstacles, including weak demand from industrial and energy end markets. Furthermore, the company’s existing restructuring plan and reduced capital expenditure for fiscal 2025 have limited the new management’s ability to spark a rally in shares, according to analysts at Charter Equity Research.
Share Price Plummet
Wolfspeed’s shares have taken a drastic hit, plummeting about 85% so far this year, vastly underperforming the S&P 500 and the Philadelphia semiconductor index. The company’s struggles are evident in its latest forecast, which fell short of Wall Street estimates.
Lowe’s Departure and Severance
As part of the settlement, Lowe, who has served as CEO since 2017, will receive a severance payment. He did not immediately respond to a request for comment. The company has named Chairman Thomas Werner as executive chairman and launched a search for a permanent CEO.
Restructuring Efforts
Wolfspeed has announced plans to book $174 million in restructuring charges for the planned closure of a facility and will lay off 20% of its workforce. Additionally, the company dropped plans to build a factory in Ensdorf, Germany, citing slower adoption of EVs in Europe.
A Challenging Road Ahead
With the departure of Lowe and the mounting challenges facing the company, Wolfspeed’s new leadership will need to navigate a complex landscape to restore investor confidence and drive growth. The company’s fate hangs in the balance as it searches for a new CEO to lead the charge.
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