EV maker Rivian cutting 6% of workforce, but manufacturing jobs spared
Rivian's layoffs will hit about 840 workers, but manufacturing jobs won't be affected
Rivian Automotive announced Wednesday that it's laying off 6% of its workforce as the electric vehicle maker looks to cut costs while ramping up production in an increasingly competitive EV market.
CEO R.J. Scaringe informed employees of the layoffs in an emailed letter obtained by FOX Business in which he said he was "deeply sorry" for the cuts.
"To deliver over the long-term, we must focus our resources on ramp and our path to profitability while ensuring we have the right set of future products, services and technology that will continue to challenge convention," Scaringe wrote. "Continuing to improve our operating efficiency on our path to profitability is a core objective and requires us to concentrate our investments and resources on the highest impact parts of our business."
SEVERAL TOP RIVIAN EXECUTIVES DEPART THE ELECTRIC VEHICLE STARTUP
Electric-vehicle startup Rivian Automotive Inc. is laying off 6% of its workforce amid a cost-cutting push. (Justin Sullivan/Getty Images / Getty Images)
Rivian, which is headquartered in Irvine, California, has a workforce of about 14,000 employees prior to the layoffs, and the 6% reduction means roughly 840 employees will be let go. The layoffs won't affect manufacturing jobs at Rivian's production facility in Normal, Illinois, according to Scaringe's email.
The company has been losing money on each vehicle it builds and narrowly missed its full-year production target of 25,000 vehicles in 2022 amid pandemic-related supply chain disruptions. The production target had previously been halved amid the challenges it faced.
RIVIAN, WARNER BROS. DISCOVERY TO JOIN NASAQ 100 IN REBALANCING
Gov. Brian Kemp after announcing that Rivian Automotive will build a $5 billion battery and assembly plant east of Atlanta, Dec. 16, 2021. (AP Photo/John Bazemore, File / AP Images)
Going forward, Rivian is expected to focus on continuing to scale up the production of its R1 trucks, in addition to EDV delivery vans for its top shareholder, Amazon. It will also move toward the launch of its high-volume R2 platform, which was pushed back to 2026 and will be made at a $5 billion facility Rivian is building in Georgia.
As Rivian's cash reserves dwindled from over $18 billion a year ago to $13.27 billion on Sept. 30, 2022, the company laid off staff last July and suspended some of its programs as it looked to restructure.
AMAZON'S RIVIAN ELECTRIC VANS NOW MAKING DELIVERIES IN 100 CITIES
Amazon has ordered 100,000 of Rivian's electric delivery vans, which will be delivered by 2030. More than 1,000 Rivian's vans are making deliveries in about 100 cities as of November 2022. (Rivian)
Rivian had a high-profile initial public offering in November 2021, but the company's shares were down about 85% from their peak that month as of Wednesday.
Following today's announcement of layoffs, Rivian shares were trading down about 3% on the NASDAQ.
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The competitive environment has gotten tougher for electric vehicle startups in recent weeks as Tesla and Ford reduced prices for their EVs.
In mid-January, Tesla cut prices on some of its models by nearly 20%, which could enable some buyers to qualify for a government tax credit. Ford announced price reductions for its Mustang Mach-E by up to $5,900 earlier this week.
Reuters contributed to this report.