Faraday Future, running on fumes, announces layoffs and pay cuts
When it emerged from start-up stealth mode in 2015, Faraday Future held the potential to make Los Angeles a center of electric car development.
Now layoffs are the way at the Gardena-based company as cash runs low, and employees will each take a pay cut of 20% — from salaried executives to hourly factory workers.
Loaded with funds from Chinese investors, the company has built prototypes of its technology-packed super-luxe FF91 sedan and planned to start selling the $180,000 vehicle next year.
But a $2-billion investment late last June from a subsidy of Chinese conglomerate Evergrande Group has gone sour, with the investor complaining Faraday has wasted hundreds of millions of dollars and Faraday insisting that Evergrande has broken agreements to make payments.
Faraday is hunting for new investors “with the goal of restoring salaries once funding is available,” it said in a statement. The company didn’t say how many of its 1,300 employees would be laid off.
Faraday Future originally was funded by a controversial Chinese internet entrepreneur named Jia Yueting, also known as YT Jia. Wanted in China for questioning by securities regulators, he spends time at a mansion another of his companies owns in Rancho Palos Verdes.
He remains Faraday’s CEO, and has agreed to cut his own pay to $1.
The company once trumpeted grand plans to build a new factory outside Las Vegas, but the dream was dashed during an earlier cash crash. After suffering almost constant executive turnover and employee defections, Faraday now is attempting to build the FF91 at a former tire plant in Hanford, in the Central Valley.