Redwood Materials has laid off 10% of its employees in a restructuring to pursue its energy storage business.

TechCrunch reports that Redwood Materials has laid off about 135 employees, or about 10% of its workforce, as it restructures to better accommodate its growing energy storage business.

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 lifted the battery recycling company’s valuation to more than $6 billion, as TechCrunch previously reported.

The battery industry has been going through difficult times recently. Earlier this month, battery recycler Ascend Elements filed for Chapter 11 bankruptcy protection, citing “insurmountable” financial difficulties. As the U.S. auto industry retreats from its most optimistic and ambitious plan to transition to electric vehicles, some battery manufacturers have also restructured or gone out of business.

But JB Straubel, founder and CEO of Redwood Materials, told employees that these new cuts are not a sign that the company is heading down the same path.

“Redwood is now stronger than ever,” Straubel wrote in an email to employees who were not laid off, according to a copy seen by TechCrunch. “The materials business is moving toward profitability and has an exciting roadmap ahead.”

Straubel noted that Redwood “continues to dominate the U.S. battery recycling market,” but touted the company’s “big momentum” in its new energy storage business. Redwood recently announced agreements with Crusoe AI and, most recently, electric vehicle manufacturer Rivian to provide recycled batteries that can be used to power the company’s facilities. The company declined to comment beyond the contents of Straubel’s email.

In his message, Straubel wrote that Redwood’s “parts of the company have expanded faster than necessary to support the direction.” According to one employee, who was granted anonymity to discuss the layoffs, he said Redwood is cutting staff across multiple departments, including its engineering and operations organizations.

“We are confident that we can deliver important projects with a smaller, more focused team,” he wrote. “We have successfully adapted to market changes that have bankrupted many of our competitors.”

Straubel went on to write, “I am more excited than ever about the path ahead for us as we build the world’s most integrated and cost-effective core materials and energy storage business.”

“This is a self-sufficient business and will make this company more valuable over time. We have the team and technology to do what other companies can’t,” he wrote.

Redwood’s chief HR officer told the laid-off workers that the layoffs were made “to strengthen our focus, operations, and team size to support Redwood’s future direction,” according to a copy of her email seen by TechCrunch.

According to Straubel’s email, laid-off employees are receiving severance pay and paid health benefits, as well as “career transition assistance.”

“Thank you to the approximately 135 employees we said goodbye to today, all of whom contributed to building Redwood,” he wrote.