Nemaska has suspended all development activities pending a refinancing after declaring a cost blowout. In December it filed for creditor protection under Canada's Companies' Creditors Arrangement Act.

It said Monday the layoffs were required as it reviewed essential activities to be carried out to ensure the continued development of Whabouchi, preserving cash while it weighed "strategic alternatives".

Nemaska claims to have one of the world's largest hard rock lithium deposits, both in volume and grade.

CEO Guy Bourassa said it was "with great sadness" that management had to let go  colleagues.

"Their hard work over the years, sometimes under challenging circumstances, allowed us to advance the Whabouchi project to the maximum while awaiting the required financing to complete it," he said.

"This difficult decision was inevitable at this point. We are offering all the support and guidance to the employees that are leaving us, and which may help them towards their next steps. We sincerely hope to have the privilege to welcome back many of them once we are able to resume the project."

The company's stock (TSX:NMX) remains suspended from trading while the company navigates the CCAA process, having shed most of its value in the quarters leading up to mid-December.