Rivian is shedding 6 % of its staff in an try to chop prices amid dwindling money reserves and a weakening economic system – to not point out the industry-wide value struggle that has simply begun.
In an electronic mail to staff seen by Reuters, Rivian CEO RJ Scaringe introduced the job cuts, explaining that the corporate is focusing sources on ramping up automobile manufacturing and changing into worthwhile.
The layoffs come as EV costs are falling within the wake of cuts made not too long ago by Tesla and Ford in the USA. The worth cuts are anticipated to have an effect on EV startups like Rivian and Lucid, that are a good distance from changing into worthwhile regardless of promoting their autos at costs nearing $100,000 or properly above (in Lucid’s case).
“We should focus our sources on ramp and our path to profitability,” RJ Scaringe stated within the electronic mail; he additionally apologized to staff for the need of the cuts. A Rivian spokesman confirmed the e-mail was despatched, however declined to make additional feedback.
The CEO added that Rivian is specializing in ramping up manufacturing of its R1 vans and EDV supply vans for Amazon, in addition to launching the R2 platform. “The modifications we’re saying right now replicate this targeted roadmap,” Scaringe stated.
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Rivian will let go about 840 of its 14,000 staff in a transfer that won’t have an effect on manufacturing operations at its plant in Regular, Illinois. The corporate stated it not too long ago added a second shift on the manufacturing unit, which is able to permit it to proceed to ramp manufacturing.
Rivian constructed simply over 25,000 autos in 2022, its first full 12 months of manufacturing. The plant not too long ago managed to attain a report of 200 autos produced in a single day.
Regardless of these constructive developments, Rivian continues to be shedding cash on each automobile it builds. Within the third quarter of 2022, the corporate was spending as a lot as thrice what it charged per automobile – and that was earlier than bearing in mind the cash spent on service, gross sales and charging infrastructure.
Fortunately, Rivian nonetheless had $13.27 billion in money and money equivalents as of September 30, 2022, due to the blockbuster preliminary public providing (IPO) in November 2021. Nevertheless, the money reserves had been down from over $18 billion a 12 months earlier.
To additional protect its money, Rivian late final 12 months shelved plans to construct supply vans in Europe with Mercedes-Benz. Earlier on, the corporate additionally pushed again the deliberate launch of a smaller R2 automobile sequence to 2026. Rivian’s shares have fallen practically 90 % from their peak in November 2021 to January 31’s shut.
