KTM allowed to continue as job layoff forecast reduced in crucial hearing

KTM will be able to continue operation by the Ried Regional Court following a hearing on Friday, while the projected number of feared staff layoffs has been reduced.

The Austrian motorcycle manufacturer is in the midst of a deep financial crisis, with KTM currently in debt for at least €1.8 billion according to creditor protection associations.

Hundreds of staff have been laid off in recent months, with more job losses expected, while salaries for November and December have so far not been paid.

However, on Friday following a hearing at the Ried Regional Court in Austria, KTM has been allowed to continue.

According to a report from Austrian media outlet ORF, KTM’s restructuring process will still proceed as planned, while the company was found to have “sufficient liquidity” until its next audit meeting.

The number of staff layoffs projected has been cut from 500 to 300, while salaries for November and December should be paid to employees by the end of January.

This will be paid out of the insolvency wage fund.

ORF also reports that KTM boss Stefan Pierer was not in attendance at the Regional Court, with the company represented by Gottfried Neumeister (Co-CEO) instead.

KTM’s restructuring plan could be boosted by a cash injection from three parties interested in doing so through the Pierer Mobility Group, said to be worth up to €700 million.

The manufacturer’s production freeze, which came into effect last week, will carry on until the end of February as it currently has a reported 130,000 unsold units sat in a warehouse.

KTM will face a creditors examination on 24 January, while the vote on its restructuring plan - which offers creditors a 30% repay within two years - will happen on 25 February.

There has been no official word yet on how this latest development will impact KTM’s MotoGP project.

Numerous figureheads have insisted since November that 2025 will continue as planned.

However, there have been media rumours that KTM will freeze development on its 2025 bike owing to the company’s ongoing financial crisis.

This has not been confirmed by KTM.

Earlier this week, administrators announced that it would be selling off KTM's 50.1% majority stake in Italian brand MV Agusta, while long-time KTM tester Jeremy McWilliams has lost his job.

Austria's Financial Market is also probing KTM over whether the Pierer Mobility Group complied with disclosure regulations this year.