Redwood Materials has laid off about 135 employees, 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. cut 5% of your workforceand three months after it closed a $425 million funding round that boosted the battery recycling company’s valuation to more than $6 billion, as TechCrunch previously reported.
It’s been a tough time in the battery industry lately. Earlier this month, battery recycler Ascend Elements introduced for Chapter 11 bankruptcy protectionciting “insurmountable” financial challenges. Some battery makers have also restructured or gone out of business as the U.S. auto industry has moved away from its most optimistic and ambitious plans to transition to electric vehicles.
But Redwood Materials founder and CEO JB Straubel told employees that this new round of cuts is not a sign that the company is headed down the same path.
“Redwood today is stronger than ever,” Straubel wrote in an email to workers who were not laid off, according to a copy seen by TechCrunch. “The materials business is on track to profitability and has an exciting roadmap ahead.”
Straubel noted that Redwood “continues to dominate the U.S. battery recycling market,” but also highlighted the company’s “huge momentum” in its new energy storage business. Redwood has recently announced deals with Crusoe AI and, more 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.
In his message, Straubel wrote that “parts of the company have expanded faster than necessary to support the direction” of Redwood. As a result, he said Redwood is making cuts across multiple divisions, including the engineering and operations organizations, according to an employee granted anonymity to discuss the layoffs.
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“We are confident we can deliver on our critical projects with a smaller, more focused team,” he wrote. “We have successfully adapted to changes in the market that have driven many of our competitors out of business.”
Straubel went on to write that he is “more excited than ever about the road ahead as we build the most integrated and profitable 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 technology to do what no other company can do,” he wrote.
Redwood’s human resources director told the workers who were laid off that the layoffs were made “to sharpen our focus, our work, and the size of our teams to support the direction Redwood is taking in the future,” according to a copy of his email, which was seen by TechCrunch.
Employees who were laid off receive severance and paid health benefits, according to Straubel’s email, as well as “career transition assistance.”
“I am grateful to the approximately 135 employees to whom we say goodbye today; they have all contributed to the construction of Redwood,” he wrote.
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