Faraday Future fires dozens of employees on unpaid leave

Recently announced investments apparently aren’t enough to get things back up and running

Faraday Future fires dozens of employees on unpaid leave

Curated via Twitter from The Verge’s twitter account….

Sputtering electric vehicle startup Faraday Future has fired dozens of employees who have been on unpaid leave for months, including manufacturing workers hired to staff the company’s factory in Hanford, California, The Verge has learned.

John Schilling, Faraday Future’s spokesperson, confirmed the cuts and Risher’s departure in an email to The Verge. “Most” of the hundreds of workers who were on furlough had already “left on their own,” Schilling said, but the company made new cuts over the last few days.

Faraday Future found itself in this most recent financial ditch after it spent most of 2018 fighting with Chinese real estate conglomerate Evergrande, which saved the startup from bankruptcy.

Faraday Future executives have also said internally that the company needs at least $500 million to get its first car, the FF91 luxury SUV, into production.

As it searched for backers, Faraday Future sold its headquarters to free up some short-term cash, and put the land it owns in Nevada — where the company once planned to build a $1 billion factory — up for sale, too.

The other investment Faraday Future recently announced came in the form of bridge financing (or a short-term loan) from Chicago firm Birch Lake Associates, which is known for dealing with restructurings and bankruptcies.

And while Faraday Future touted the deal’s ceiling of $225 million, the startup has likely only received a fraction of that so far.

Evergrande reduced its stake in the company to 32 percent and allowed Faraday Future to find new investors.

But Faraday Future founder and CEO Jia Yueting spent the first $800 million installment ahead of schedule.

Faraday Future then placed hundreds of workers on unpaid leave, and expanded that furlough in December to include hundreds more.

Evergrande pledged $2 billion to Faraday Future in exchange for a 45 percent stake in the startup at the end of 2017.

It’s not clear how much Faraday Future has received so far from either of these deals, but some of the money is likely being used to pay off the company’s debts.

And in April, Faraday Future announced it had signed on an investor willing to put up to $225 million into its stalled US operations.

In addition, Jeff Risher, Faraday Future’s vice president of product, technology, and IP strategy, left the company earlier this year, The Verge has learned.

The two sides then spent months fighting with each other, and in the meantime Faraday Future nearly ran out of money again.

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