The British electric vans startup Arrival is cutting 800 jobs, about half its remaining workforce, to reduce costs as it seeks extra funding and plans US expansion to take advantage of green energy subsidies.
The troubled electric vehicle maker said “approximately 50%” of the company’s 1,600-strong global workforce would leave the company.
Arrival told investors that the job cuts, and other measures to trim spending, would results in a halving of its operating costs to “approximately $30m (£24m) per quarter” following a review of its operations.
The US-listed company has switched its strategy from focusing on the UK to developing a foothold in the US van market, with plans to start production in Charlotte, north Carolina, next year “subject to raising additional capital”.
It hopes to benefit from Joe Biden’s Inflation Reduction Act, a package of $369bn in subsidies and tax credits for companies investing in electric vehicles and renewable energy technologies, as long as the products and parts they manufacture are made in the US.
In the UK, Arrival spent heavily on robot-heavy factories in Banbury and Bicester but cut 800 jobs last July.
The latest job cuts are the first act of Igor Torgov, who joined the company last February and has now taken on the role of chief executive.
Torgov replaces interim chief Peter Cuneo, who stepped into the role in November when founder Denis Sverdlov, a Russian telecoms billionaire, stepped aside.
Cuneo led the stock market listing that injected $660m into the company.
However, start-ups across the sector have struggled in recent months including Britishvolt, the electric vehicle battery maker which collapsed into administration this month after struggling to secure investment.
The company has appointed financial advisory firm Teneo to assess options including raising more capital and improving its balance sheet.
Torgov said: “The actions support our journey to become a champion in innovative products and new, more efficient methods of vehicle production, particularly in the important US market for commercial electric vehicles.
“We are keenly aware that these decisions, while necessary, will have a profound impact on a significant number of our colleagues. We are 100% committed to supporting our employees during this difficult process.”
The company was valued at more than $15bn on the Nasdaq in New York at its height, but the shares slumped during 2022 and the firm is now worth $250m.
Arrival had cash on hand of $205m at the end of last year, it said.
On listing, the firm had said it planned to focus on vans and buses before potentially moving into smaller passenger vehicles, with a focus at first on taxis, but with the possibility of cars for consumers too.
Arrival was founded in west London in 2014 by Sverdlov, who sold telecoms firm and mobile phone maker Yota in 2013.
0 Comments