Things are growing grimmer for Faraday Future as the company has had to shut down its electric vehicle factory in California.
Some employees have been laid off, others placed on furlough while the startup is trying to secure funding to save the company.
As we reported last month, it seemed like the startup was finally out of the woods after a large Chinese holding company promised a massive $2 billion investment in Faraday Future, but after a fallout with the investors, the company recently had to lay off employees and cut salaries.
FF is running out of cash again and it is looking for new investors.
But in the meantime, things are getting even more difficult for the company.
Most of the employees at the Hanford factory, where FF was gearing up to build the FF91, its first all-electric production car, have been laid off or put on furlough, according to local news reports. FF told employees on furlough to not expect work until at least next year.
ABC reports that about 40 people were laid off and 60 were furloughed over the last month, leaving only about 10 managers and directors at the factory.
Dag Reckhorn, a former Tesla executive who has been leading FF’s manufacturing effort, has also resigned.
After Nick Sampson last week and Peter Savagian before him, Reckhorn becomes the third FF senior exec to leave in as many weeks.
The changes have roughly put a stop to the progress at the plant. Sources told Electrek that FF is even auctioning off some equipment and machinery – resulting in a major step back.
John Schilling, director of communications at Faraday Future, responded to the ABC’s report:
I will confirm we have had some folks laid off as well as others furloughed recently at our Hanford facility but I cannot confirm exact numbers. You are correct on the timing of the two workforce adjustments however. Please know that FF is actively pursuing other investors (funding plan) so we can bring our Hanford operations back online but this process will take some time.
During this interim period, FF is requiring certain employees to take an unpaid leave of absence (furlough) for the months of November and December and is offering other employees the option of taking the furlough for the same period of time. Employees who joined FF after May 1 must take a furlough. For those employees who started with FF before May 1, they may continue to work their regular schedule at a reduced level of compensation. All employees will continue to receive healthcare benefits if they previously received benefits from FF.
This was an extremely tough decision to make, and we recognize the emotional stress and financial strain this puts on people’s personal lives. We are grateful to all of the hundreds of employees who are willing to stay and continue to work on the FF 91 core project, as well as those who will be on a temporary furlough. In addition, we take our relationship with our suppliers seriously, and we hope to receive support and understanding from our global partners as FF overcomes our difficulties.
FF anticipates the furlough to last through the end of December 2018. However, the actual length of this furlough depends on the funding plan that is being vigorously pursued. We continue to push forward to find additional funding from investors globally as we strive to retain our people and our suppliers.
We take pride in our close-knit community, and we are mindful of the impact these changes will have on our employees and their families. FF was born to disrupt and we are committed to making progress towards our goals, and continuing the necessary investments in our people, our products, technology, and business to develop an industry-leading connected mobility ecosystem without compromising our core values.
That’s sad. Mainly for the employees who lost their jobs. They even started a GoFundMe campaign to help them.
It’s also sad for EV startups in general since FF was once seen as the leading EV startup and they don’t have much to show for after spending over $1 billion of their investors’ money.
I don’t think it is necessarily representative of other EV startups, which are being managed differently, but it could nonetheless make investors more hesitant about investing in the segment.
But it’s not over. While I find it difficult to believe at this point, they could still turn things around with a fresh round of funding.
I think the most likely outcome is that the startup will fold and a company will acquire what is left of it. Perhaps an auto company that is lagging in the EV space or a tech company like Apple or Google could buy the IP and the FF91 could live on in some future vehicles.
What do you think? Let us know in the comment section below.
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