Nick Sampson, co-founder of Gardena-based electric vehicle manufacturer Faraday and Future Inc., resigned on Oct. 30 after calling the company “effectively insolvent.”
Sampson’s departure is the latest defection from Faraday; the company’s vice president and chief engineering designer Peter Savagian left on Oct. 29.
Sampson is one of Faraday’s three co-founders and served as senior vice president of product strategy for the company. In an email obtained by The Verge, Sampson said “the company is effectively insolvent in both its financial and personnel assets, it will at best will limp along for the foreseeable future.”
“I feel that my role in Faraday Future is no (longer) a path that I can follow, so I will leave the company, effective immediately. I cannot continue knowing the devastating impact we are having on the lives of our employees, their families and loved ones as we as the ripple effect this will have on lives throughout our suppliers and the industry as a whole.”
Sampson said in the email that he would consider returning to the company if circumstances “should materially change.”
Founded 2014, Faraday made headlines in June 2018 after receiving a $2 billion investment from Chinese real estate firm Evergrande Group. Evergrande gave Faraday an initial installment of $800 million, which ran out just under two months later in July. After being denied a request for the remaining $1.2 billion from Evergrande Group, Faraday took the case to arbitration in Hong Kong, where an arbitrator allowed Faraday to seek up to $500 million in new investment money from investors approved by Evergrande.
A statement provided by a Faraday spokesman confirmed Sampson and Savagian’s departures, and suggested creditor Evergrande was to blame for the financial hardships.
“Recent actions taken by Evergrande is causing Faraday Future to experience extraordinary financial hardship," the statement said. "The investor has intervened in the company’s capital planning and is preventing Faraday Future from utilizing our assets, which requires (us) to take some very difficult yet necessary actions.”
To conserve funds, Faraday Chief Executive Jia Yueting announced unpaid furloughs for employees who began working after May 1, 2018, according to The Verge, which pegs Faraday’s monthly payroll at about $10 million. Currently, hourly workers who have been with the company more than six months are not subject to the furloughs but they have been demoted to minimum wage, while full-time staff workers are operating under reduced salaries of $50,000 annually, a roughly 20 percent wage cut.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Silicon Beach Report Oct. 30: Executive Exits at Faraday Future
- Silicon Beach Report Dec. 4: Faraday Future Faces More Furloughs
- Silicon Beach Report Feb. 27: Faraday Future Continues Furloughs
- Faraday Future Sells Gardena Headquarters
- Eyeing Electric
- Silicon Beach Report Nov. 30: Bankruptcy on Horizon for Faraday Future?
- Silicon Beach Report October 26: Faraday Future Faces Further Financial Troubles
- Silicon Beach Report Oct. 8: Faraday Future Weighs Options