Faraday Future Intelligent Electric Inc is slashing all employee salaries by 25% from next month in an effort to preserve cash as the startup seeks new capital needed to launch its debut electric vehicle.
(Bloomberg) — Faraday Future Intelligent Electric Inc is slashing all employee salaries by 25% from next month in an effort to preserve cash as the startup seeks new capital needed to launch its debut electric vehicle.
The Los Angeles, California-based company announced the across-the-board salary cuts, which are expected to last from Nov. 1 through year-end, in an email to workers sent last week. They come after Faraday laid off a few dozen employees earlier in the month, according to two people familiar with the matter.
Representatives for the company did not reply immediately Tuesday to a request for comment.
Faraday has seen its cash reserves dwindle rapidly. It recently reported having $39 million in cash as of Sept. 21, down from around $47 million at the end of August.
The company said in the emailed memo, which was viewed by Bloomberg News, that employees will be granted restricted stock units, or RSUs, equivalent to the amount being cut from their salary and which will vest in December. Faraday also offered employees the option of taking a larger salary cut in exchange for more valuable RSUs, though it noted that any RSUs granted will be forfeited if the employee is terminated.
Faraday became a publicly traded company in a July 2021 merger that raised about $1 billion, but has struggled since then to enter commercial production of its promised EVs. It has delayed the launch of its first EV until at least 2023, and has spent the last few months locked in a fight with its largest shareholders, including a group that is partially managed by co-founder Jia Yueting.
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