Another founder resigns, and some employees are out on unpaid leave.
Faraday Future has been in the spotlight quite a lot recently but not for the kind of things that they would have hoped. Funding issues with Chinese real estate firm the Evergrande Group have put a huge strain on resources. It appears that the amount Evergrande was to supply to FF has been in dispute and while FF has now been allowed to seek investors elsewhere, their immediate cash flow shortage has meant that drastic measures need to be taken.
Layoffs and salary cuts just a week ago were the first steps, and after reaching out to Faraday Future we have also found out that two of its co-founders have resigned in as many days.
First, it was Peter Savagian, FF’s senior vice president of technology and product development, followed closely by Nick Sampson, one of the original co-founders, who tendered his resignation too. In an email, Sampson wrote that Faraday Future was effectively insolvent and he felt upset about the effect this was having on the employees and their families as well as suppliers depending on their business.
He did sign off saying that if the situation was to turn around he would consider returning to the company, however at this point there were insurmountable barriers that he had not been able to resolve.
As it stands, the last founding member and company CEO, Jia Yueting remains at the company and has now ordered that any employee who started working at FF after May 1 must take a compulsory furlough (unpaid leave) until further notice. Longer standing full-time employees will receive a reduced salary while part-time workers who have been there longer than six months will be paid a minimum wage.
In an email to CarBuzz, Public Relations Manager Jacob Brown explained further, "FF anticipates the furlough to last through the end of December 2018. However, the actual length of this furlough depends on the funding plan that is being vigorously pursued. We continue to push forward to find additional funding from investors globally as we strive to retain our people and our suppliers."
He went on to say that since FF received a favorable ruling in its arbitration against Evergrande last week they were actively pursuing funding from other sources, although this process will take some time. Let’s hope things turn around soon enough for the beleaguered company to get back on track to finalizing its long-awaited EV.