Arriving will let go of around half its remaining workforce in a bid to cash-out this year, as the struggling British electric van startup appoints a new chief executive amid efforts to raise funds.
The company’s ambition to make electric vans in a small-scale factory attracted investment from Hyundai and was floated two years ago with a valuation of $15 billion.
But the group ran into various problems when they tried to advertise their products.
In December, it issued a “persistent concern” warning that it would run out of cash within 12 months, with a cash burn in that period leaving its reserves fully depleted by the summer.
On Monday, the company named Igor Torgov, a former Microsoft and telecommunications executive who had worked at Arrival for two years, as its new chief executive, along with a new wave of job losses.
The group will cut 800 jobs, mainly in England and Georgia, the third in a series of job losses since last summer.
Torgov told the Financial Times the company faces “hard decisions” in the coming weeks, and said the current strategy is fundamentally sound, but may require “tweaks and improvements”.
Last year, the group ditched plans to produce vehicles in the UK, and instead focused on vans for the US market, which will be made in a factory in South Carolina that has yet to be built.
Torgov said that the plan is “the best use of limited resources”, and “if it is done correctly, and with all discipline, it can be an attractive message for investors”.
He added that the business does not expect to start producing US vans until the second half of 2024, which is sooner than expected. The FT reported last year that the US model faced a two-year delay.
The cuts announced Monday will cut quarterly spending from low-revenue businesses by about $30 million. At the end of December, Arrival had $205 million in cash available, he said.
The fundraising efforts, which include appointing Teneo as a financial advisor in the search for a buyer or investor, are “promising,” Torgov said. The cuts “give us the right time to work with investors”, he added.
Torgov, who has an MBA from California State University and worked at Microsoft, previously ran Russian mobile phone group Yota, and retail tech equipment maker Atol.
At both companies, he oversaw cost-cutting programs or significant strategy changes, he said.
“I’m familiar [with turnrounds]I don’t get any fun out of it,” he said. “We’ve got all this talent, and most of the people at Arrival are smart people, and they’re doing a lot of good things to bring the company forward.”
Torgov also indicated that he is reviewing the future of the controversial Arrival 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, known as a pet project of Arrival founder and chairman Denis Sverdlov, was protected from cost-cutting, despite the business laying off hundreds of workers at the time and delaying other projects, including buses .
Torgov said the aircraft program is “probably the only thing that is still under discussion”, and he hopes to announce the decision in an update to the group’s investors in early March.