Faraday Future plans layoffs, wage cuts as money troubles resurface

Faraday Future has once again shifted to a poorer outlook as the electric car startup prepares to lay off employees and cut employee salaries.

The latest measures in frugality come as Faraday Future feuds with its main investor over new installments of funds.

The Verge reported on the forthcoming layoffs and wage cuts on Monday after obtaining emails sent to the company’s workforce. According to the emails, Faraday Future will slash salaries by 20 percent and hourly workers will also see a 20-percent pay cut. Top executives volunteered to take larger pay cuts, however, and CEO Jia Yueting will take just $1 a year annually as his salary.

What’s unclear is the number of employees Faraday Future plans to shed as it once again faces money troubles. The report said the company hasn’t filed any layoffs with California, where it’s based, but we’ll likely know soon enough how many workers will depart and how high up the layoffs with reach.

Faraday Future completes first pre-production FF91 on August 28, 2018

Faraday Future completes first pre-production FF91 on August 28, 2018

The latest financial qualm comes as the electric car startup feuds with its largest investor (and saving grace), Evergrande Health. CEO Yueting reportedly approached the Chinese health conglomerate and asked for an advance on the company’s next installment of funding, but the company refused his request. Evergrand Health agreed to invest $2 billion, pending various production goals, in return for a 45-percent stake.

The investor reportedly hasn’t paid the next $700 million due to the startup, but the latest report from The Verge claims Yueting requested the funds far ahead of schedule and burned through the first $800 million in the first six months of this year.

Faraday’s bad news comes as the company completed its first pre-production car in August. The first FF91 electric SUV rolled off of the assembly line in Hanford, California, ahead of the first customer deliveries planned in the first half of 2019. The latest troubles suggest that timeline could be pushed back.

Company emails also explained Faraday Future is seeking «funding opportunities with those who share our vision.» The sentiment further suggests the startup may not have the rest of Evergrande Health’s funds secured.

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