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Faraday Future has received a small lifeline after announcing drastic moves earlier this week to keep the company afloat during a dispute with its main investor. The Hong Kong International Arbitration Center has authorized the launch of the electric car to solicit new funding of up to $ 500 million from investors outside the current $ 2 billion agreement. of dollars with the Chinese group Evergrande. Evergrande obtains the first right of refusal for any potential investor who comes forward, according to a document filed on the Hong Kong Stock Exchange.
Meanwhile, the 20% cut in wages and salaries started earlier this week remains in place and layoffs have already begun, according to several people in and around the company. Some people were even released with these 20% reductions applied during their last check, and without severance pay, The edge has learned. And, while hundreds of employees remain focused on producing the company's luxury electric SUV, others have described: The edge an atmosphere of gloom and paranoia – including fears of electronic surveillance – at Faraday Future headquarters in Los Angeles.
Faraday Future called the outcome of the arbitration "decisive victory" in a public statement released Thursday. A spokesman for the company confirmed to The edge layoffs occurred throughout the week, but stated that he "can not disclose the extent nor the duration of this process". This spokesperson also did not deny the fact that the company's management oversees employees' communications.
Faraday Future received the first $ 800 million of Evergrande's investment early in the year and used it to prepare a plant in Hanford, California, where it hoped to start production of its FF91 electric car by the end of 2018. The balance, or $ 1.2 billion, was to be split into several $ 600 million increments indexed to production targets in 2019 and 2020. The investment has been approved by the US Foreign Investment Committee.
The $ 800 million had virtually disappeared in July, said Evergrande earlier this month in a document filed on the Hong Kong Stock Exchange. The founder and CEO of Faraday Future, Jia Yueting, has asked Evergrande – led by China's third-richest billionaire – a $ 700 million advance. When the Chinese real estate conglomerate finally declined, Jia asked for arbitration in Hong Kong. In the meantime, the company has blocked payments to suppliers and sellers.
Faraday Future said Thursday that the referees had decided that the start-up could now look for outside investment as long as the battle with Evergrande would continue. "Today's decision definitely allows FF to accept new financing from investors around the world, and we welcome all investors who share our vision," the company said in a statement.
"For reasons of confidentiality, we can not disclose any information related to arbitral proceedings," said a spokesman for the Hong Kong International Arbitration Center in an email. The representatives of Evergrande could not be reached.
Although the decision provides potential leeway for Faraday Future, the wage cuts and layoffs announced earlier this week are still in the process of being implemented. In fact, Faraday Future was already letting people go after the first signs of a clash with Evergrande, according to a company official, who wishes to remain anonymous because they have signed a confidentiality agreement. Officials from across the company were asked to take advantage of the situation with Evergrande to fire people they did not like, the person said.
More than 100 people were fired this week and between 30 and 50 percent of the 1,000 or so company employees could be at risk, according to two people familiar with the layoffs and wishing to remain anonymous for fear of legal repercussions. .
An employee who was fired Thursday, and who was granted anonymity because he signed a confidentiality agreement, says the company has reduced his last pay check by 20% and does not offer any compensation from departure. The same thing happened to other people who have been working for the company for a short time, according to one of the people familiar with the layoffs.
"Employees were fired without compensation, and the law does not require employers to pay severance pay," Faraday Future spokesman John Schilling said in an e-mail.
A second employee who was laid off this week after two years at Faraday Future, however, indicated that he was offered a typical severance package. (Anonymity was also granted because of the confidentiality agreement required within the company.)
According to the Department of Employment Development, no notice of termination has been filed with the State of California. The EDD tells The edge that the Government Workers Redevelopment and Retraining Notification Act requires companies with 75 or more employees to provide 60 days notice prior to the layoff of 50 or more employees in a 30-day period . The law, however, defines "employee" as a person employed for at least six months of the following year. "We are in compliance with all of California's labor laws and regulations, that's all I can say about it now," Schilling said.
Faraday Future had hired about 300 people since May, according to the manager. Until now, many dismissed people were also entrepreneurs and not full-time employees, said one of the company's relatives. In a previously undisclosed lawsuit filed this week in the Los Angeles Superior Court, the Tentek technical staffing firm said Faraday Future owed more than $ 200,000 to employees it had hired for the first time. account of the company.
Faraday Future has always had a secret culture, but has become a paranoia in recent months, according to the director and a former employee who left earlier this month. Some workers fear that communications on their company's phones and computers will be monitored and that conference rooms will be buggy, they say. The edge. An employee found "read" emails that they never opened, said the manager. In addition, according to the manager, the hundreds of new employees in the summer created layoffs that provoked competition. "It's like a big prison," said this person.
"FF has an e-business policy that is similar to most businesses, and all employees agree on it before they are employed," Schilling said in response to a question about these fears.
Faraday Future narrowly escaped the collapse of the end of 2017 thanks to Evergrande's money, but the start-up is now almost as it had started before the investment. Jia is now tasked with finding investors willing to take the risk of launching a luxury start-up with a troubled past. Evergrande – which is currently facing potential financial difficulties in a weakened Chinese economy – does not want to push further the $ 1.2 billion still to be paid.
Many of the company's employees in and around Faraday Future are looking for other opportunities, not least because of their high salaries (one of the key tools for the start-up to attract talent ) are not so high anymore. "It's a complete madhouse, things are so upside down," said the employee whose last salary was cut.
Others still have faith in Faraday Future. "I am absolutely convinced that I will come back," said the employee who was laid off after two years. L & # 39; Company is much closer to the entry into production of the FF91 than it was at the same time last year (although the first pre-production unit suffered a small fire) . And Jia is notorious in China for being distracted from the difficult financial situation by any means necessary.
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