Redwood Materials has cut 135 jobs, or about 10% of its workforce, as it restructures to better accommodate its growing energy storage business, TechCrunch has learned.
The cuts come just five months after Redwood lays off 5% of the workforceand three months after closing a $425 million funding round, according to TechCrunch, it valued the battery recycling company at $6 billion. previously reported.
It’s been a tough time in the battery industry lately. Earlier this month, battery recycler Ascend Elements applied For Chapter 11 bankruptcy protectionciting “insurmountable” financial difficulties. Some battery makers have also restructured or gone out of business as the US auto industry has backed away from its most optimistic and ambitious plans for a transition to electric vehicles.
But JB Straubel, founder and CEO of Redwood Materials, told employees that this latest round of layoffs is not a sign that the company is headed down the same path.
“Today, Redwood is the strongest it’s ever been,” Straubel said in an email to employees who weren’t fired, according to a copy seen by TechCrunch. “The materials business is moving towards profitability and has an exciting roadmap ahead.”
Straubel noted that Redwood “continues to dominate the US battery recycling market,” but also has shown “great momentum” in the company’s new production. energy storage business. Redwood recently announced deals with Crusoe AI and, most 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.
Straubel wrote in his message that “parts of the company are expanding faster than necessary to support Redwood’s direction.” As a result, Redwood said it made layoffs in multiple divisions, including engineering and operations, 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, more focused team,” he said. “We have successfully adapted to changes in the market that have bankrupted many of our competitors.”
Straubel later wrote that he is “more excited than ever about the road ahead 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 the technology to do what no other company can do.”
Redwood’s chief HR officer told the laid-off employees that the layoffs were “in order to sharpen the size of our teams to support our focus, our business and the direction Redwood is going in the future,” according to a copy of the email seen by TechCrunch.
Laid-off employees receive severance and paid health benefits, as well as “career transition assistance,” according to Straubel’s email.
“I’m grateful to the approximately 135 employees we say goodbye to today – all of whom have contributed to the building of Redwood,” he said.
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