Layoffs Target Overexpanded Teams (Image Credits: Unsplash)
Redwood Materials, a leader in battery recycling, eliminated approximately 135 positions – about 10% of its workforce – this week to realign operations with its expanding energy storage business. The restructuring reflects the company’s response to rapid changes in market demands, particularly in powering data centers and manufacturing facilities. Founder and CEO JB Straubel emphasized in an internal email that the firm stands at its strongest point yet, poised for profitability in core operations.[1]
Layoffs Target Overexpanded Teams
Straubel notified remaining employees that certain divisions had grown faster than required to support the company’s evolving priorities. The cuts spanned engineering and operations groups, allowing Redwood to maintain momentum on key projects with a leaner, more focused team. An anonymous employee confirmed the scope affected multiple areas, signaling a deliberate trim rather than broad distress.[1]
The chief HR officer explained the moves as necessary to refine focus and team sizes for future goals. Laid-off workers received severance packages, continued health benefits, and career transition support. Straubel expressed gratitude for their contributions, underscoring the tough but strategic nature of the decision.
Energy Storage Fuels Redwood’s Momentum
Redwood launched its energy storage unit, Redwood Energy, in June 2025, repurposing retired EV batteries into large-scale systems for AI data centers and grid applications. This division quickly became the company’s fastest-growing segment, driven by partnerships such as a recent deal with Rivian to supply at least 10 megawatt-hours for manufacturing.[2][3]
Other collaborations include Crusoe for modular data centers and hyperscalers eyeing gigawatt-hour projects. Redwood’s San Francisco R&D facility expanded fourfold to 55,000 square feet, employing nearly 100 specialists in hardware and power electronics. Straubel highlighted this “great momentum” as central to building the world’s most integrated critical materials and storage operation.[1]
- Crusoe: 12 MW/63 MWh system in Texas for AI infrastructure.
- Rivian: Battery repurposing for Illinois plant, announced April 2026.
- GM and others: Pursuing U.S.-built batteries for storage.
- Partners like Panasonic, Volkswagen, and Volvo in materials recycling.
Recent Funding and Prior Restructurings
Three months ago, Redwood closed a $425 million Series E round, drawing investments from Google and Nvidia to scale energy storage. This followed a $350 million raise in October 2025 that valued the company above $6 billion. Despite these infusions, the firm trimmed 5% of staff – around 60 roles – in November 2025 amid a pivot to AI-related storage.[4][1]
Founded in 2017 by former Tesla CTO JB Straubel, Redwood dominates U.S. battery recycling, recovering lithium, nickel, cobalt, and copper from scrap and end-of-life packs. It has since added cathode production and now stockpiles gigawatt-hours of batteries for storage.[5]
Battery Sector Faces Headwinds
The industry grapples with setbacks, including rival recycler Ascend Elements’ Chapter 11 filing earlier this month due to financial hurdles. U.S. automakers have scaled back aggressive EV goals, pressuring supply chains. Redwood, however, positions itself differently through its dual focus on materials and storage.[1]
Straubel assured staff the materials business nears profitability with a strong roadmap. The company adapts to shifts that felled competitors, leveraging technology for a self-sustaining model. Details emerged from emails viewed by TechCrunch.[1]
Key Takeaways
- 135 jobs cut (10% workforce) to align with energy storage surge.
- Redwood Energy thrives via AI data center and EV partnerships.
- Recent $425M funding backs expansion despite industry woes.
Redwood Materials charts a resilient course amid battery market volatility, betting big on storage to drive long-term value. Will this focused team deliver on ambitious promises? Tell us in the comments.
