Citing a dispute with its primary investor, Faraday Future announced today employee salaries and hourly wages will be cut by 20 percent, CEO Jia Yueting’s salary has been reduced to $1 a year, and the company is facing an unclear amount of layoffs as it tries to stay afloat long enough to secure new financing and begin vehicle production by the end of the year.
News of the salary cuts and layoffs was sent to employees in an email Sunday night, according to The Verge, the details of which have since been confirmed to Jalopnik by a Faraday Future spokesperson.
The company’s statement claimed its main investor, Evergrande, has failed to “live up to its end of the bargain and make the payments it agreed to,” forcing the company to take the austerity measures. Faraday also claims some members of the leadership team have taken greater salary cuts, and that it’s “pursuing funding opportunities with those who share our vision.”
As previously reported by The Verge, FF CEO Jia Yueting attempted to back out of the financing deal with Chinese real-estate firm Evergrande, leading to a “stalemate.” Evergrande committed to $2 billion over three years for a 45 percent stake in the company, but FF spent the first $800 million installment earlier this year.
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Here’s more on the current “stalemate” from The Verge:
Jia tried to get the board of directors to approve an advance of $700 million, and when Evergrande said no, the CEO took the case to an arbitrator in Hong Kong. The outcome of that arbitration case is still not clear, but Faraday Future said in Sunday’s email that it’s “pursuing funding opportunities with those who share our vision.”
Faraday has struggled to gain financing in the past after a major push to raise $1 billion failed under Evelozcity CEO Stefan Krause, who subsequently left his position as CFO of Faraday Future after pushing the company to file for bankruptcy, leading to a major legal dispute. FF managed to secure a deal with Evergrande to stay afloat at the last minute.
Back in July, Faraday Future indicated it was prepared to start series production of its electric car reported to have over 1,000 horsepower by the end of this year, but it’s unclear if these new issues with Evergrande will end up causing a critical delay in those plans.