Arrival will lay off about half of its remaining workforce to avoid running out of cash this year, as the struggling UK electric van start-up appoints a new chief executive amid a bid to raise money. new fund.
The company’s ambition is to make electric truck in small-scale factories that helped it attract investment from Hyundai and emerged two years ago with a value of $15 billion.
But the group encountered a problems while trying to commercialize its product.
In December, it issued an “ongoing” warning that it would run away from the cast within 12 months, with a cash burn at the time potentially causing its reserves to be completely depleted by the summer.
On Monday, the company appointed Igor Torgov, a former Microsoft and telecoms executive who has been at Arrival for two years, as its new chief executive, along with a wave of job losses. new.
The group will cut 800 jobs, mostly in the UK and Georgia, in its third round of job losses since last summer.
Torgov told the Financial Times the company faces “difficult decisions” in the coming weeks and said the current strategy is fundamentally sound, but may need “adjustment and improvement”.
Last year, the group abandoned plans to make a vehicle in the UK and instead focused on a truck for the US market, which will be built at an unbuilt plant in South Carolina.
Torgov said the plan is “the best use of our limited resources” and that “if done right and with all the right principles, it could be an appealing message to the investors”.
He added that the business is not expected to start manufacturing the US trucks until the second half of 2024, which is later than expected. The FT reported last year that the US model faced a delay of two years.
The cuts announced on Monday will bring the low-revenue business’ quarterly spending to about $30 million. At the end of December, Arrival had about $205 million in cash available.
Torgov said fundraising efforts, including appointing Teneo as a financial advisor to find buyers or investors, were “promising”. The cuts “give us reasonable time to work with investors,” he added.
Torgov, who holds an MBA from California State University and worked at Microsoft, previously ran the Russian cell phone group Yota and the retail technology device maker Atol.
At both companies, he said, he oversaw cost-cutting programs or key strategic shifts.
“I’m familiar [with turnrounds], I don’t get any pleasure out of it,” he said. “We have all this talent and the vast majority of people at Arrival are brilliant people, and have done a lot of good to keep the company going.”
Torgov also said he was looking into the future of Arrival’s controversial flying vehicle program, which the company has kept secret from investors.
Called “Jet,” employees were told at a meeting last year that the side venture, understood to be an exciting project by Arrival’s founder and president, Denis Sverdlov, had been secured. protected from cost-cutting, even though the business laid off hundreds of workers at the time and delayed other projects, including a bus.
Torgov said the plane program is “probably the only thing still under discussion,” and he hopes to announce the decision at the group’s investment press conference in early March.
