Redwood Materials Lays Off Around 135 Employees, Cutting 10% To Restructure For Energy Storage

Battery-recycling startup Redwood Materials has laid off around 135 employees—roughly 10% of its workforce—as it restructures to better accommodate its growing energy storage business, TechCrunch reported.

“The US startup Redwood Materials, known for its battery recycling operations, is laying off around ten per cent of its workforce”

electrive

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, TechCrunch said.

electrive

The company’s founder and CEO JB Straubel told employees that the layoffs were not a sign Redwood was heading down the same path as competitors, writing, “Redwood today is the strongest it’s ever been.”

In the same internal message, Straubel said, “The materials business is well on its way to profitability and has an exciting roadmap ahead.”

TechCrunch also reported that Redwood declined to comment beyond the contents of Straubel’s email, while an employee granted anonymity said the cuts were made across multiple divisions, including engineering and operations.

Redwood’s chief HR officer told affected workers 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 TechCrunch’s review of a copy of her email.

Straubel added that workers leaving the company were receiving severance and paid health benefits, as well as “career transition assistance,” and he wrote, “I am grateful to the approximately 135 employees who we say goodbye to today — they’ve all contributed to building Redwood.”

Redwood’s job cuts land during a period of stress in the battery industry, with multiple outlets pointing to recent failures and restructurings beyond Redwood itself.

TechCrunch said the cuts follow earlier industry turbulence, noting that “Earlier this month, battery recycler Ascend Elements filed for Chapter 11 bankruptcy protection, citing ‘insurmountable’ financial challenges.”

TechCrunch

TechCrunch also described how “Some battery makers have also restructured or gone out of business” as the U.S. automotive industry “backed away from its most optimistic and ambitious plans to transition to electric vehicles.”

The American Bazaar similarly tied Redwood’s layoffs to the broader sector, writing that Ascend Elements “filed for Chapter 11 bankruptcy” and that “Across the industry, several battery makers have scaled back operations or shut down, as U.S. automakers pull away from some of their most ambitious electric vehicle rollout plans.”

In electrive’s report, Redwood’s restructuring is framed as a pivot rather than a retreat, but it still places the layoffs in the same sequence of workforce reductions: “The cuts follow a reduction of around 5% of its staff just five months earlier.”

electrive also reiterated the funding context, saying Redwood “secured$425 million in fundingfrom investors, including Google and a subsidiary of Nvidia,” and that the company’s valuation rose “to north of $6 billion.”

Across the coverage, JB Straubel’s message is consistent in emphasizing adaptation, including his line that Redwood has “successfully adapted to changes in the market that have bankrupted many of our competitors.”

In the internal rationale described by TechCrunch and echoed by other outlets, Redwood’s leadership framed the layoffs as a response to internal scaling that outpaced the company’s needs.

“Battery recycling firm Redwood Materials has cut about 135 jobs, roughly 10% of its workforce, as it reshapes its structure to support a rapidly expanding energy storage business, according to a report by TechCrunch”

The American Bazaar

TechCrunch reported that Straubel wrote, “parts of the company have expanded faster than needed to support the direction” of Redwood, and that he said Redwood was making cuts across multiple divisions, including the engineering and operations organizations.

electrive similarly said Straubel justified the decision by stating that the company had grown its staff more quickly than necessary in some areas, describing the same reasoning as “Parts of the company have expanded faster than needed to support the direction” Redwood is headed in.’”

The American Bazaar also described the restructuring as a “strategic reset rather than a sign of trouble,” quoting Straubel’s message that “The materials business is well on its way to profitability and has an exciting roadmap ahead.”

In addition to the “expanded faster than needed” explanation, Straubel told employees Redwood would deliver critical work with fewer people, writing, “We are confident that we can deliver on our critical projects with a smaller team that is more focused.”

TechCrunch reported that employees who were laid off were told they would receive severance and paid health benefits, and it also quoted the phrase “career transition assistance” from Straubel’s email.

electrive added more detail about benefits and support, saying affected employees will receive “severance pay, paid health insurance, and support for their professional transition.”

Multiple outlets connected Redwood’s restructuring to a strategic emphasis on energy storage, describing a shift from its earlier battery-recycling and materials focus toward Redwood Energy and stationary battery storage systems.

electrive said Redwood aims to focus more intensively on its emerging battery storage business segment, and it described Redwood Energy as a “new subsidiary, Redwood Energy,” launched “in the summer of 2025.”

electrive

That outlet said Redwood Energy develops “Battery Energy Storage Systems (BESS), or stationary battery storage systems,” and it explained that “A large proportion of these systems use retired electric vehicle batteries that still have a too good a state of health for recycling but are instead given a second life in BESS.”

electrive also described how Redwood’s homepage order reflects the company’s priorities, quoting the self-description: “We’re providing domestic energy storage at scale, securing U.S. critical materials, and powering the next era of American energy.”

It further stated that these energy storage systems are “primarily intended to supply power to (AI) data centres and the national grid.”

TechCrunch, meanwhile, reported that Redwood has recently announced deals with Crusoe AI and, most recently, electric automaker Rivian to provide recycled batteries that can be used to power those companies’ facilities.

In Straubel’s internal message, TechCrunch quoted his enthusiasm for the combined materials and storage direction, writing that he is “more excited than ever with our path ahead as we build the most integrated and cost-effective critical materials and energy storage business in the world.”

Beyond the layoffs themselves, the reporting emphasizes Redwood’s scale and financial position, while also describing what the company says it will do next.

“Redwood Materials has laid off around 135 employees, or roughly 10% of its workforce, as it restructures to better accommodate its growing energy storage business, TechCrunch has learned”

TechCrunch

TechCrunch said the $425 million funding round closed three months earlier and boosted Redwood’s valuation to “north of $6 billion,” and it described the company as a battery-recycling firm restructuring to “better accommodate its growing energy storage business.”

TechCrunch

electrive added that Redwood is “considered the market leader in battery recycling in North America” and claims to process “over 20 GWh of batteries annually through its end-of-life battery supply chain,” which it said “roughly equates to 250,000 electric vehicles.”

electrive also claimed that “according to Redwood, accounts for 90% of all lithium-ion batteries and battery materials recycled in North America,” tying Redwood’s scale to its materials business.

For the immediate aftermath, TechCrunch reported that workers laid off were told they would receive severance and paid health benefits, and it quoted Straubel’s line about “career transition assistance.”

The American Bazaar similarly said employees affected by the layoffs were told the decision was meant “to sharpen our focus, our work and the size of our teams to support the direction Redwood is going in the future,” and it reiterated that Straubel said those leaving would receive “severance, continued health coverage for a period of time, and career transition support.”

Across the outlets, Straubel’s message is that Redwood is positioned to keep executing, writing, “This is a self-sustaining business and will continue to make this company more valuable over time,” and TechCrunch added that he said Redwood has “the team and the technology to do what no other company can.”