Do they understand what ‘management’ is?
Faraday Future, our absolute favourite electric-vehicle startup to poke fun at, has announced austerity measures to its staff following a spat between its CEO and majority-stakeholder Evergrande. The latter company was seen as Faraday’s knight-in-shining-armour when it announced a multi-billion dollar investment in the company at the eleventh hour, but continued pressures from Faraday boss Jia Yueting have soured the relationship, it seems.
To understand how this all began, we have to rewind towards the end of 2017. Faraday Future was at the end of its rope with precious little money left in the bank, unable to service the US$12-million payroll commitment it had, let alone deal with the mounting bills for services rendered from multiple vendors. When Evergrande stepped in, it pledged US$2-billion towards Faraday’s future in exchange for a 45% stake in the company, though that investment would be available only in tranches based on certain targets & production expectations.
The first transfusion of US$800-million came about earlier this year, and was accompanied by unusually-upbeat reports of Faraday servicing its debts and paying staff. However by the middle of the year, Evergrande reported that Jia Yueting had spent nearly all of that money, and had come back to the board of directors at Evergrande to approve the second tranche of cash, valued at $700-million. Evergrande said no, case went to arbitration in Hong Kong (where it remains), and Jia Yueting is back on the fund circuit with Faraday, “pursuing funding opportunities for those who share our vision.”
“Faraday Future is facing issues with its current funding, because of Evergrande’s failure to live up to its end of the bargain and make the payments it agreed to. The company is committed to monitoring its finances and will reevaluate this decision with the goal of restoring salaries once funding is available.” — Emailed Statement, Faraday Future
Despite having rolled out a working prototype very recently, the very first of the breed it seems, The Verge reports that emails were sent out to staff informing them of incoming austerity measures, that’ll take effect next week. This includes 20% pay cuts to both salaried staff and hourly staff, as well as the laying-off of staff in other roles. It’s worth noting that they didn’t go into detail about how many people would be laid off, and the state of California has yet to receive a layoff notice from Faraday Future.
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