Financial issues force China-backed electric start-up to drastically reduce costs.
Faraday Future appears to be in some strife because of conflict with its main investor, cutting salaries and laying off employees to stay afloat, according to a new report.
The Verge says an email was sent to staff over the weekend, detailing a 20 per cent decrease in wages for employees effective next week, with some losing their jobs entirely.
CEO Jia Yueting has reportedly decreased his annual salary to just US$1 ($1.41), while some members of the management team have also elected to take 20 per cent salary cuts.
“The company is committed to monitoring its finances and will reevaluate this decision with the goal of restoring salaries once funding is available,” the email reportedly reads.
According to The Verge, Faraday Future’s money issues stem from its recent fight with Chinese real estate firm, Evergrande, its main investor and a 45 per cent stakeholder.
Problems arose when Jia tried to get a US$700 million ($988.93m) advance earlier this month, having churned through the initial funding instalment of US$800m ($1130.21m) during the first half of this year.
Evergrande reportedly declined the request, and Jia took the case to a Hong Kong arbitrator as a result – though the outcome of the case is still not on record as yet.
It appears things didn’t go so well during litigations, though, as Faraday Future is now seeking “funding opportunities” from other sources, which the company published in the same email detailing the cost cuts earlier this week.
“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 said.
This marks the second time the electric start-up has run into financial issues with its major investor, after Jia’s other company, LeEco, ran into its own money troubles.
Faraday Future is aiming to launch its first model – the all-electric FF 91 crossover (pictured) – in the first half of 2019, though this latest roadblock could pose another delay in the company’s plans.
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