Redwood Materials reportedly cuts 5% of staff after $350M raise

Redwood Materials reportedly laid off roughly 5 percent of its staff, representing a few dozen people out of its approximately 1,200-strong workforce.

This reduction comes shortly after the company closed a US$350 million funding round in October 2025, boosting its valuation to around US$6 billion.

Why the Cuts

Redwood began as a battery recycling firm, recovering valuable materials like lithium, cobalt, and nickel from spent electric vehicle batteries, consumer electronics, and production scrap.

In recent years, the company expanded into manufacturing cathode materials and launched a new business line repurposing used EV batteries for grid-scale energy storage. This segment has gained traction, especially as data centers that support AI workloads demand more power and storage infrastructure.

The layoffs appear to reflect a reallocation of company resources rather than financial distress. Redwood is streamlining operations and focusing on automation and scalable processes to support its newer energy storage and critical minerals refining ambitions.

By reducing a small portion of its workforce and scaling automation, Redwood aims to improve efficiency and margins as it grows its battery reuse and grid-storage solutions.

What This Shift Means for Redwood and the Industry

This move illustrates how companies in the battery and clean energy space are adjusting to changing market realities. As demand for electric vehicles fluctuates and global supply chain pressures affect battery raw material economics, firms like Redwood are betting on energy storage and recycled battery materials for long-term stability.

The pivot toward grid-scale energy storage aligns with rising demand for power and storage infrastructure by data centers and utilities, especially as AI and high-power computing continue to expand. Redwood’s strategy may accelerate the development of a more sustainable and domestic battery supply chain, reducing reliance on virgin materials.

At the same time, the layoffs show that such transitions can require difficult trade-offs. Even with major funding secured, companies may restructure or reallocate human capital to adapt to evolving strategic priorities.

What to Watch Next

It will be important to observe how Redwood uses its new funding to scale its storage and refining operations. Success could position the company as a major player in battery supply chains and energy infrastructure.

It will also be worth monitoring how Redwood balances automation, growth, and workforce changes, and whether further restructuring occurs or the pivot stabilizes operations.

The broader battery reuse and energy storage sector may take cues from Redwood’s outcome. If this model succeeds, it could influence other firms and potentially reshape how battery recycling and storage are handled in a world increasingly driven by AI and renewable energy needs.