Arrival of electric cars and vans, one of the “green dozen” planet-friendly startups showcased by Boris Johnson, will cut up to 800 jobs to keep its money as it faces a “challenging economic environment”.
The company, which reached a valuation of $13 billion last year, at a stock exchange in New Yorkmust cut costs and employees by 30 percent to keep enough money to survive until the end of next year, it said.
The company has 2,700 employees worldwide, meaning about 810 jobs are at risk.
Founded in 2015, Arrival was listed as one of Boris Johnson’s ‘green dozen’ sustainable British champions last year. The company described its inclusion on the list as “an honor”.
It said in a statement: “Arrival has proposed plans that include a realignment of the organization that would enable it to deliver on business priorities through the end of 2023, primarily by leveraging the $500 million at hand.
“Arrival’s proposal includes a targeted 30 percent reduction in spending across the organization and expects it to potentially impact up to 30 percent of employees worldwide.”
Last March, the company achieved a valuation of $13 billion when it entered the stock market through a merger with a special acquisition company (Spac), cash shells that were booming during the pandemic.
Like its electric car rivals, it took on a rating closer to that of a tech company than an automaker when it first hit the market. However, the shares have fallen quickly in line with the broader technology sector because borrowing costs have risen and economic prospects have darkened. It is now worth less than $1 billion.
Rising energy and labor costs are among the challenges faced by electric vehicle manufacturers, especially those new to the market. Despite a deal with UPS, Arrival has not yet made any commercial vehicles.
Arrival plans to make its cars and vans in micro-factories close to customers rather than in the huge factories traditionally used to build vehicles.
It says it can convert a warehouse to make cars for $50 million, well below the billions needed for a regular car factory.
Launched by Russian entrepreneur Denis Sverdlov, Arrival was largely self-funded from his $500 million venture fund Kinetik until its investment two years ago by BlackRock and Fidelity.
Sverdlov had founded several internet companies in the 2000s, before briefly becoming deputy minister of communications under Vladimir Putin’s prime minister, Dmitry Medvedev in 2012, in 2012. He is now based in London.
The company closed its Russian operations in the wake of the country’s war against Ukraine.