Redwood Materials has laid off around 135 employees, or roughly 10% of its workforce, in a restructuring move it says will help it chase its growing energy storage business. This delightful news comes just five months after the company cut 5% of its staff, and a mere three months after it closed a $425 million funding round that boosted its valuation to over $6 billion.
It seems the battery industry is having a bit of a moment. Earlier this month, battery recycler Ascend Elements filed for Chapter 11 bankruptcy, citing "insurmountable" financial challenges. Other battery makers have also restructured or gone under as the U.S. automotive industry has gently backed away from its most wildly optimistic EV transition plans.
Founder and CEO JB Straubel, in an email to the survivors, insisted this is not a sign the company is heading down the same path. "Redwood today is the strongest it's ever been," he wrote, adding that the materials business is "well on its way to profitability." He noted Redwood continues to "dominate the US battery recycling market" and has "great momentum" in its new energy storage business, citing recent deals with Crusoe AI and Rivian.
Straubel explained that "parts of the company have expanded faster than needed," leading to cuts across multiple divisions, including engineering and operations. "We are confident that we can deliver on our critical projects with a smaller team that is more focused," he wrote, adding they have "successfully adapted to changes in the market that have bankrupted many of our competitors."
He concluded with the kind of visionary rhetoric that typically follows a round of layoffs, stating he is "more excited than ever" to build "the most integrated and cost-effective critical materials and energy storage business in the world." The company's chief HR officer told affected employees the cuts were made "to sharpen our focus."
The approximately 135 departing employees will receive severance, paid health benefits, and "career transition assistance." Straubel expressed his gratitude, writing, "they've all contributed to building Redwood."