Electric vehicle start-up Arrival cuts 800 jobs as it focuses on US future

Electric vehicle start-up Arrival cuts 800 jobs as it focuses on US future

Arrival, the British start-up focused on the development of commercial electric vehicles, has announced it will cut its workforce by half as it focuses on incentivising its operations in the United States.

The company said the layoffs, part of a plan to significantly cut costs, would leave it with 800 employees worldwide.

Details of where the bulk of the job losses would occur were not yet known.

Most of its teams are based in the UK and Georgia – the latter destination a result of the company’s decision to pull out of Russia over the Ukraine war.

Arrival is struggling to grow due to ongoing difficulties raising finance — with start-ups generally finding it harder to secure supplies and manage increased costs.

Financing difficulties taken into account Britishvolt earlier this month.

Arrival previously announced it was shifting its focus from its UK operations, which include state-of-the-art manufacturing and development facilities in Oxfordshire, to benefit from the sweeteners being offered by the US government.

Incentives for green energy initiatives, available to both businesses and the public, under the Anti-Inflation Act have put tremendous pressure on western governments and the European Union (EU) to follow suit or lose green investment.

The EU, for example, argues that the $369 billion (£298 billion) subsidy package breaks World Trade Organization rules because the law would discriminate against imported goods.

While public road trials in the UK have begun and are ongoing with its first certified and registered vans, Arrival expects its US van product to begin production in Charlotte, North Carolina in 2024.

However, this remains dependent on raising additional capital.

Arrival said it hired Teneo, a financial advisor, to help “evaluate strategic alternatives, including opportunities to raise additional capital, optimize its balance sheet and improve liquidity.”

The company added, “Combined with other real estate cost reductions and third-party spending, the company expects to halve the ongoing cash cost of operating the company to approximately $30 million per quarter.

The company also appointed Igor Torgov, who joined the company in February 2020, as chief executive officer.

He said of the task ahead: “Arrival has developed unique technologies in a market that has enormous potential for growth and can play a key role in addressing it climate change.

“To unlock these opportunities, we must make difficult decisions and act quickly.

“Following a detailed assessment of Arrival and the broader EV market over the past two months, the leadership team and board have taken decisive actions to ensure the most effective use of our current resources and to optimize the efficiency of the business.

“These actions support our journey to become a champion of innovative products and new, more efficient methods of vehicle production, particularly in the important US commercial electric vehicle market.

“We are very aware that these decisions, while necessary, will have a profound impact on a significant number of our colleagues. We are 100% committed to supporting our people through this difficult process.”

Sky news

(c) Sky News 2023: Electric vehicle startup Arrival is cutting 800 jobs as it focuses on the future of the US

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