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The electric vehicle start-up Faraday Future is about to run out of money because it forces some workers to take unpaid leave, reports The Verge.
According to the publication, the automaker has shut down some operations at its headquarters in Gardena, California, and at its Hanford, Calif. Plant. Faraday Future CEO Jia Yueting reportedly told employees that workers starting on or after May 1 of this year would be on leave without pay until the builder received new funding. Full-time employees who started before May 1 may continue to work at a reduced salary of $ 50,000 per year. Hourly employees who have been working for more than six months may choose to stay at Faraday Future at the minimum wage, Yueting was quoted as saying.
A Faraday Future representative confirmed to Business Insider that employees who entered after May 1st were required to take unpaid leave, while those who started before May 1st could continue to work "with a reduced level of pay", but did not specify in what way. a lot of compensation will be reduced. The representative added that the duration of these changes will depend on a "financing plan that is vigorously applied", adding that the builder predicts that the stay will last until the end of the year.
"It was an extremely difficult decision to make, and we recognize the emotional stress and the resulting financial stress on everyone's personal lives, and we are grateful to the hundreds of employees who wish to stay and continue working on the FF. project, as well as those who will benefit from a temporary stay, "said the representative.
The representative attributed the financial problems of Faraday Future to his dispute with investor Evergrande Health Industry Group, which, according to the builder, prevented him from seeking external financing. The representative added that an arbitrator had decided last week that Faraday Future could now apply for funding from other sources.
Nick Sampson, one of the builder's founders, reportedly resigned on Tuesday, saying Faraday Future was "effectively insolvent" in an email to employees.
"The company is effectively insolvent in both financial resources and personnel, it will be at best [sic] drinks along for the foreseeable future. I think my role in Faraday Future is not long [sic] a path that I can follow, so I will leave society, from now on, "Sampson would have written.
The representative of Faraday Future confirmed the departure of Sampson.
A Faraday Future representative told Business Insider last week, following a report from The Verge, that it would cut wages for employees and salaried employees by 20% while dismissing an undisclosed number of workers. . The representative added that Mr. Yueting would reduce his salary to 1 dollar, some members of the manufacturer's management team reducing their wages by more than 20%.
Faraday Future was founded in 2014 and struggles to build its future FF91 electric SUV, despite financial concerns. Faraday Future has faced lawsuits and supplier privileges that claim they have not been paid, and the first pre-production version of FF91 caught fire hours after being shown to employees and their families, according to The Verge.
Yueting, who is also the founder and chairman of the Chinese technology company LeEco, had blocked $ 182 million of assets frozen by the Chinese government because of unrealized loan repayments.
You can read Faraday Future's full statement below:
We can confirm the recent departures of Peter Savagian, Senior Vice President, Global Product and Technology and Nick Sampson, Senior Vice President, Product Strategy – we wish them the best of luck in their future endeavors.
As you may be aware, the recent actions taken by Evergrande have caused extraordinary financial hardship for FF. The investor has intervened in the capital planning of the company and prevents FF from using our assets, forcing FF to take very difficult but necessary steps.
FF received a favorable decision in its arbitration against Evergrande last week and could now seek funding from other sources, which FF is actively seeking, although this process will take some time.
During this interim period, FF is asking certain employees to take a leave without pay (leave) for the months of November and December and offers other employees the opportunity to take the leave for the same period. Employees who joined FF after May 1st must take a leave. For employees who started working with FF before May 1st, they can continue working on their regular schedule with a reduced level of pay. All employees will continue to receive health benefits if they previously received FF benefits.
It was an extremely difficult decision to make, and we recognize the emotional and financial stress that results for people's personal lives. We are grateful to the hundreds of employees who are willing to stay and continue working on the main FF 91 project, as well as those who will benefit from a temporary respite. In addition, we take our relationships with our suppliers seriously and hope that our international partners will provide their support and understanding as FF overcomes our difficulties.
FF provides that the stay will last until the end of December 2018. However, the effective duration of these stays depends on the financing plan that is vigorously pursued. We continue to seek additional financing from investors around the world while striving to retain our staff and suppliers.
We are proud of our close-knit community and the impact these changes will have on our employees and their families. FF was born to disrupt and we are committed to making progress in achieving our goals and to making the necessary investments in our people, products, technology and business to develop a leading connected mobility ecosystem in the future. Industry without compromising our core values.
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