NuScale lays off almost a third of its workforce

9 January 2024

US-based NuScale is laying off 28% of its workforce in a decision taken at a virtual all-hands meeting. A NuScale statment confirmed the details of the layoffs. NuScale’s stock price subsequently fell by more than 8% as investors sold off shares.

Until November, NuScale appeared to be leading the field to deploy the first small modular reactor (SMR) in the USA. Utah Associated Municipal Power Systems (UAMPS) and NuScale Power had agreed to construction of six small modular reactors (SMRs) at the US Department of Energy's (DOE’s) Idaho National Laboratory (INL) as part of the Carbon Free Power Project (CFPP). However, the project was cancelled. “Despite significant efforts by both parties to advance the CFPP, it appears unlikely that the project will have enough subscription to continue toward deployment,” a joint statement said.

NuScale’s stock began trading on Wall Street in 2022 through a special purpose acquisition company whereby NuScale merged with a publicly traded investment fund and adopted that firm’s stock listing, thereby avoiding investor scrutiny that usually accompanies public offerings.

In its latest third quarterly earnings, the latest available, NuScale reported cash and equivalents of $196.6m, revenue of $7m and a net loss of $58.3m for the three-month period ending 30 September. This compared to revenue of $3.2 m and a net loss of $49.6m for the same period in 2022 , meanwhile cash, equivalents and short-term investments had stood at $252m at the the end of Q1.

On a call with analysts in November, Ramsey Hamady, NuScale’s chief financial officer, said the firm expected to “take in about $50m worth of cash from customers from work that we do.” However, the company spent more than that in the previous three-month cycle, HuffPost noted. “This isn’t just a fixed-expense business. There’s variable expense, and there’s a lot of discretionary spending,” the paper cited Hamady as saying. “We spend more as we have contracts, and we pull in our spending as contracts either get pushed out or delayed or whether we want to focus more on discretionary spend or nondiscretionary spend.”

The US government sees SMRs as one way to achieve its climate goals and has invested billions of dollars to promote their development. At the United Nations’ climate summit in Dubai in December, the US led an international pledge to triple nuclear energy production worldwide in the next three decades. “But the US trails rivals like China and Russia in deploying new types of reactors, including those based on technologies that scientists working for the federal government first developed.” HuffPost noted.

NuScale had more than 550 employees at the start of the year. Its headquarters are in Portland, Oregan but most of the staff are in Corvallis. NuScale’s actions are projected to result in approximately $50-60m in annual savings, which includes a workforce reduction of 154 full-time employees. The company anticipates first quarter severance costs to be approximately $3m.

NuScale issued a statement announcing, “certain strategic actions to better position itself commercially, financially, and strategically”. NuScale President & CEO John Hopkins said: “Our US Nuclear Regulatory-approved, industry-leading SMR technology is already many years ahead of the competition. Today, commercialisation of our SMR technology is our key objective, which includes near-term deployment and manufacturing.” Hopkins concluded, “We continue to invest in our future, including work needed for the near-term deployment of our SMR power plants powered by our 77 MWe NuScale Power Modules.”

NuScale said it “is taking steps to transition from R&D to commercialisation and aims to focus resources in key strategic areas as part of its growth and to strengthen its position going forward”. These actions “reinforce NuScale’s business as the leading SMR technology provider and align resources with core priorities, which include advancing revenue-generating projects, securing new orders and positioning NuScale towards long-term success”.

Image: Visualisation of a nuclear power plant using the VOYGR reactor from NuScale

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