For the second time in a year, the electric car startup Arrival is cutting jobs. The company announced on Monday that it would lay off around half of its workforce. This move will reduce Arrival’s workforce to around 800.
“Following a detailed review of its operations and markets, Arrival now announces immediate actions to further reduce its operating costs and optimize the use of its current cash resources, including the difficult decision to reduce its global workforce by approximately 50% to 800 employees ‘ the company said in a statement.
Financial situation deteriorates
In the middle of last year, Arrival warned that it was short on cash, and the company’s financial position appears to have continued to deteriorate since then, writes tech blog Engadget. By the end of 2022, Arrival said it had $205 million in cash.
Following the recent round of layoffs and a handful of other cost-cutting measures, the EV startup expects to reduce ongoing operations costs to about $30 million per quarter. Arrival has previously announced that it intends to focus its resources on developing its US van product. The company currently anticipates that production can begin in Charlotte in 2024, subject to additional capital being raised by investors.
Three years ago, Arrival seemed to have a bright future. At that time, the US parcel service UPS ordered 10,000 electric delivery vans in Europe and North America. A stake by UPS in Arrival was also discussed.
New CEO
In the same statement Monday that Arrival announced the layoffs, the company also announced a change in leadership. Less than three months after taking over as CEO, former Marvel Entertainment CEO Peter Cuneo is handing over day-to-day operations to Igor Torgov, Arrival’s former executive vice president of digital. He now faces the task of turning the once promising start-up upside down.
Arrival will provide more details on its 2023 business plan, financial outlook and production during a webcast scheduled for March 9th.
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