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 its workforce and three months after it closed a $425 million funding round that boosted the battery recycling company’s valuation to north of $6 billion, as TechCrunch previously reported.
It’s been a tough time in the battery industry lately. Earlier this month, battery recycler Ascend Elements filed for Chapter 11 bankruptcy protection, citing “insurmountable” financial challenges. Some battery makers have also restructured or gone bankrupt as the US auto industry has backed 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 the strongest it has ever been,” Straubel wrote in an email to the workers who were not laid off, according to a copy seen by TechCrunch. “The materials business is well on its way to profitability and has an exciting roadmap ahead.”
Straubel noted that Redwood “continues[s] to dominate the US battery recycling market,” but also highlighted the company’s “great momentum” in its new energy storage business. Redwood recently announced deals with Crusoe AI and, most recently, electric car maker Rivian to supply 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 business have expanded faster than necessary to support the direction” of Redwood. As a result, he said Redwood is cutting across several divisions, including the engineering and operations organizations, according to an employee who spoke on condition of anonymity to discuss the layoffs.
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“We are confident that we can deliver on our critical projects with a smaller team that is more focused,” he wrote. “We have successfully adapted to changes in the market that have bankrupted many of our competitors.”
Straubel went on to write that he is “more excited than ever about our path forward as we build the most integrated and cost-effective critical materials and energy storage business in the world.”
“This is a self-sustaining business and will continue to make this business more valuable over time. We have the team and the technology to do what no other company can,” he wrote.
Workers who were laid off were told by Redwood’s head of HR that the layoffs were made “to sharpen our focus, our work and the size of our teams to support the direction Redwood is going in the future,” according to a copy of her email seen by TechCrunch.
Employees who were laid off are receiving severance pay and paid health benefits, according to Straubel’s email, as well as “career transition assistance.”
“I am grateful for the approximately 135 employees we are saying goodbye to today – they have all contributed to building Redwood,” he wrote.
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