China's EV maker Faraday Future plans lay-offs, 20 percent pay cuts

HONG KONG (Reuters) - Faraday Future, a start-up that is developing electric vehicles (EV), said on Tuesday it planned pay cuts of 20 percent for all staff, in addition to an unspecified number of lay-offs, in a bid to reduce operational costs.

The move comes as the company is embroiled in a stand-off with its primary investor, China’s Evergrande Health Industry Group Ltd, after a planned $2 billion investment from the unit of Evergrande Group went sour.

Faraday Future Chief Executive Jia Yueting had also agreed to a salary of $1 a year, the company said. The EV start-up did not say how many staff would be laid off.

“We are in the process of implementing plans to cut staff wages by 20 percent, hourly paid workers will also see a wage cut by 20 percent and this will take immediate effect in accordance with the law in California,” the company said.

Faraday Future, which has ambitions of overtaking Tesla, added that it was looking for investors.

Faraday Future was founded by entrepreneur Jia, whose conglomerate LeEco is battling a cash crunch after a period of rapid expansion. The start-up posted a net loss of $339.6 million in 2017.

Reporting By Anne Marie Roantree, Donny Kwok and Clare Jim; Editing by Darren Schuettler and Sherry Jacob-Phillips