Redwood Materials has let go of around 135 employees, approximately 10% of its workforce, to better align with the expansion of its energy storage business.
The layoffs occur five months after Redwood previously cut 5% of its staff and three months following the closure of a $425 million funding round, which elevated the battery recycling company’s valuation to over $6 billion.
The battery industry has faced challenges recently. Earlier this month, battery recycler Ascend Elements filed for Chapter 11 bankruptcy due to financial difficulties, while some battery manufacturers have restructured or shuttered operations as the U.S. auto industry retreats from ambitious electric vehicle plans.
Redwood Materials founder and CEO JB Straubel assured employees that these layoffs do not indicate company decline. Straubel stated that “Redwood today is the strongest it’s ever been,” and that the materials business is progressing towards profitability with an exciting future.
Straubel emphasized that Redwood continues to dominate the U.S. battery recycling market while gaining traction in its new energy storage business. The company recently secured deals with Crusoe AI and Rivian for recycled battery supply. Straubel also noted that parts of the company had expanded more quickly than necessary, leading to cuts across several divisions, including engineering and operations.
“We are confident that we can deliver on our critical projects with a smaller, more focused team,” he added, stating their ability to adapt to market changes that have challenged competitors. Straubel expressed excitement for Redwood’s future as it builds an integrated and cost-effective materials and energy storage business, describing it as a self-sustaining and increasingly valuable company.
Employees informed of the layoffs were told the decision was made to refine focus and team size towards Redwood’s future direction. Affected employees will receive severance, paid health benefits, and “career transition assistance.”
Straubel expressed gratitude to the departing employees for their contributions.