Redwood Materials has laid off about 135 employees, or about 10% of its workforce, as it restructures to better accommodate its growing energy storage business, according to TechCrunch.
The cuts come just five months after Redwood cut 5% of its workforce and three months after it closed a $425 million funding round that valued the battery recycling company at $6 billion, as TechCrunch previously reported.
It’s been a tough time in the battery industry lately. Earlier this month, battery recycling company Ascend Elements filed for Chapter 11 bankruptcy protection, citing “insurmountable” financial challenges. A number of battery makers have also restructured or gone out of business as the US auto industry has retreated from its more optimistic and ambitious plans to transition to electric vehicles.
But Redwood Materials founder and CEO JB Straubel told employees that this new round of cuts isn’t a sign that the company is on the same path.
“Redwood today is the strongest it’s ever been,” Straubel wrote in an email to employees who weren’t fired, according to a copy seen by TechCrunch. “The materials business is well on its way to profitability and has an exciting roadmap ahead.”
Straubel noted that Redwood “keep going[s] to dominate the US battery recycling market” but also highlighted the company’s “great momentum” in its new energy storage business. Redwood recently announced deals with Crusoe AI and, more recently, electric car maker Rivian to provide recycled batteries that can be used to power those companies’ facilities. The company declined to comment beyond the content of Straubel’s email.
In his message, Straubel wrote that “parts of the company have expanded faster than necessary to support the direction” of Redwood. As a result, he said Redwood is making cuts across multiple departments, including engineering and operations organizations, according to an employee who spoke on condition of anonymity to discuss the layoffs.
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“We are confident that we can deliver on our critical projects with a smaller team that is more focused,” he wrote. “We have successfully adapted to market changes that have bankrupted many of our competitors.”
Straubel went on to write that he is “more excited than ever about our path forward as we build the most integrated and cost-effective critical materials and energy storage business in the world.”
“This is a self-sustaining business and will continue to make this company more valuable over time. We have the team and technology to do what no other company can,” he wrote.
The laid-off employees were told by Redwood’s head of HR that the layoffs were “to sharpen our focus, our work and the size of our teams to support the direction Redwood is going in the future,” according to a copy of her email, which was seen by TechCrunch.
Laid-off workers are receiving severance and health benefits, according to Straubel’s email, as well as “career transition assistance.”
“I am grateful to the approximately 135 employees we are saying goodbye to today – all of whom contributed to the construction of Redwood,” he wrote.
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