Arrival, the U.K.-based commercial EV company, plans to slash costs and cut as much as 30% of its workforce as it attempts to protect the business from a challenging economic environment while meeting its production targets.
The company, which went public last year via a merger with a special purpose acquisition company, said the restructuring plan includes a targeted 30% reduction in spending across the entire business. It anticipates the reorganization could “potentially impact up to 30% of employees globally.” The plan would allow the company to meet its targets through late 2023 using the $500 million of cash it has on hard.
The cuts are designed to keep Arrival on track to start production of its commercial EV van in the third quarter of this year, the company said. Arrival added that it must address challenges such as supply chain issues, an ongoing pandemic, geopolitical tensions and rising inflation now as it starts production this year.
The company will provide more details on the plan during its second-quarter earnings call scheduled for August 11.
Arrival is one in a growing list of EV companies issuing layoffs and slashing spending as economic conditions tighten. Rivian CEO RJ Scaringe told employees this week in an email viewed by TechCrunch that job cuts may occur. Tesla has also laid off hundreds of employees.
While Arrival is staring down a considerable reduction in spending and layoffs, it has fared better than many of its EV SPAC brethren — a group of companies that have faced SEC investigations, insolvency and executive shuffling.
The company, which has centered its business plan around using microfactories to build its products, announced in May that its electric bus model achieved certification in the European Union with customer models expected to be produced by the second half of this year.
Arrival said in its first-quarter earnings report it expects to produce 400 to 600 vans plus low-volume production of buses in the second half of 2022. The report also notes that Arrival has collected a total of 143,000 nonbinding letters of intent and orders for its vehicles as of May, including the commitment from UPS to buy up to 10,000 vehicles from the startup in the U.S. and Europe.