Create a free Industrial Equipment News account to continue

Faraday Cuts Salaries on the Way Out the Door

One report claims managers are being told to use the situation to fire workers they don't like.

Faraday Future is a company fully embracing the die hard creed.

Early last week, the company announced that it was cutting salaries by 20 percent and laying off workers as well.

The company is reportedly at odds with it's primary investor, the Evergrande Group which agreed to invest $2 billion in the company. Faraday received $800 million at the beginning of the year, but it was gone by July as the company tried to get the company's FF91 electric car into production by the end of 2018. The company was strapped and trying to free up the additional $1.2 billion of the investment, which was tied to production goals in 2019 and 2020.

Evergrande balked, Faraday was desperate and the company started cutting. However, late last week, the company won an arbitration case that gave them the ability to seek $500 million from outside investors. Of course, Evergrande has first right of refusal, but some thought that the new lease on life might curtail the pay cuts and layoffs.

Unfortunately, that is not the case. According to a report from The Verge, the layoffs have already started, as has the 20 percent pay cut. What's particularly unfortunate is that the employees who were laid off didn't receive any severance, and the company took a fifth of their last check as they headed out the door. I mean, at least they got something. Just maybe cash those checks before the weekend.

According to The Verge, managers are being told to use the situation to fire workers they don't like. The company reportedly cut 100 people last week, and up to 400 more jobs could be in jeopardy.

Vendors and suppliers have still not been paid, including a staffing company that helped place some of these employees and is now suing Faraday.

Cash those checks today, people.

More in Operations