Rivian will hold an all-hands staff meeting Friday amid concerns the electric vehicle startup plans to lay off hundreds of employees.
On Monday, Bloomberg reported the company with a factory in Illinois and plans to build a second plant in Georgia is weighing a workforce reduction of around 5%, with a particular focus on non-manufacturing jobs. The company employs nearly 14,000 people.
|RIVN||RIVIAN AUTOMOTIVE INC.||20.59||-0.94||-4.37%|
In a memo sent to employees Monday evening and reviewed by FOX Business, CEO RJ Scaringe said the company is "financially well positioned" and that its outlook "remains strong." However, he noted Rivian is "not immune to the current economic circumstances" and needs to take action to ensure it is growing sustainably.
"As a result, we’ve implemented changes across Rivian, including prioritizing certain programs (and stopping some), halting certain non-manufacturing hiring and adopting major cost down efforts to reduce material spend and operating expenses," he explained. "We also began the process of aligning the organization as a whole to ensure we are as focused, nimble and efficient as possible to achieve our priorities and objectives."
While the memo did not get into any specifics, Scaringe emphasized that Rivian would be as "thoughtful as possible" in considering any workforce reductions.
"Every decision about our team is being assessed through the lens of our strategic priorities, not as a mechanism to simply reduce costs," he added. "Our team will continue to grow in support of our production ramp and product roadmap."
In addition to optimizing its costs and operating expenses over the next 18 months, Rivian will focus on "ramping and enhancing" its R1 vehicles and electric delivery vans, accelerating the development of its R2 vehicles and expanding its "go-to-market capabilities", including its charging and service infrastructure.
In the first quarter of 2022, Rivian's net loss widened to $1.59 billion from $414 million during the same period a year ago. The company reported approximately $17 billion in total cash and liquidity as of the end of March. Rivian, which has struggled to meet its production targets, cut its 2022 production guidance earlier this year to a total of 25,000 vehicles.
Last week, the company said it was on track to meet that guidance after producing 4,401 vehicles at its manufacturing facility in Normal, Illinois during the second quarter and delivering 4,467 vehicles during the same period. The company will release its full second quarter earnings results on August 11.
As of the time of publication, Rivian stock has fallen 70% year to date.