Arrival to drop half of workforce in cost-cutting drive
Arrival is refocusing its resources on a larger 'XL' van for the lucrative US market
Struggling start-up names new Igor Torgov as its new CEO as it announces it will make 800 staff redundant
British EV start-up Arrival will slash its headcount by half – 800 staff – in its latest round of cost-cutting measures.
Most of the redundancies will be made in the UK and Georgia (the US), reported the Financial Times.
Through this and other spending cuts, Arrival expects to halve its cash operating costs to around $30 million (£24.2m).
It has also appointed management consulting firm Teneo to help with raising additional capital, optimising its balance sheet and improving liquidity.
The latest round of job losses – Arrival’s third since last summer – comes after the company’s November 2022 warning that it will run out of money by July without a fresh cash injection.
Arrival has also appointed former digital head Igor Torgov as its new CEO, taking the reins from interim boss Peter Cuneo.
Torgov said: “Accepting this important role at a critical point in Arrival’s journey is a significant responsibility.
“Arrival has developed unique technologies in a market that has huge growth potential and can play a key role in addressing climate change. To unlock these opportunities, we need to make difficult decisions and to take swift action.
"Following a detailed evaluation of Arrival and the wider EV market during the past two months, the leadership team and the board have taken decisive action to ensure the most effective use of our current resources and optimise the efficiency of the business.
“The actions support our journey to become a champion in innovative products and new, more efficient methods of vehicle production, particularly in the important US market for commercial electric vehicles.
“We're keenly aware that these decisions, while necessary, will have a profound impact on a significant number of our colleagues. We're 100% committed to supporting our employees during this difficult process.”
Arrival is refocusing its resources on producing a larger ‘XL’ version of its electric van for the US market, where margins are higher and incentives are greater.
The company previously said in a statement: “The major factors in the company’s decision to shift focus to developing its US business included the tax credit recently announced as part of the Inflation Reduction Act – expected to offer between $7500 (£6300) to $40,000 (£33,000) for commercial vehicles.”
Arrival halted development of its ride-hailing car and stopped trials of its bus last August as part of its bid to save cash.
The firm’s 'Jet' programme – reported to be a pet project of founder Denis Sverdlov and kept secret from investors – is “probably the only thing that is still under discussion”, Torgov told the FT.