SAN FRANCISCO — Rivian Automotive is shedding 6% of its workforce in an effort to chop prices because the EV maker, already grappling with falling money reserves, braces for an industry-wide worth battle.
The corporate is focusing assets on ramping up car manufacturing and reaching profitability, Chief Govt R.J. Scaringe mentioned in an e-mail to staff on Wednesday saying the job cuts. Reuters obtained a replica of the e-mail.
Layoffs at Rivian come amid falling EV costs kicked off by cuts made just lately by Elon Musk-led Tesla and Ford Motor Co.
The value cuts by Tesla and Ford are anticipated to harm EV upstarts equivalent to Rivian, Lucid Group and British startup Arrival, which Monday mentioned it might lay off half its workers.
Regardless of a blockbuster preliminary public providing in November 2021, Rivian’s shares have fallen practically 90% from their peak that month to Tuesday’s shut. Rivian’s inventory was buying and selling down 4% on Nasdaq on Wednesday, paring some losses after information of the job cuts.
“We should focus our assets on ramp and our path to profitability,” Scaringe mentioned within the e-mail, by which he apologized to staff for the need of the cuts.
A Rivian spokesman confirmed the e-mail was despatched, however declined additional remark.
‘Bleeding money’
“They’re bleeding money and wish to develop at a a lot quicker fee, however they proceed to battle with their EV manufacturing ramp and have been unable to meaningfully drive down unit prices,” CFRA Analysis analyst Garrett Nelson mentioned. “We predict that’s what’s behind this determination.”
Rivian is specializing in ramping up manufacturing of its R1 vans and EDV supply vans for high shareholder Amazon.com, and launching its R2 platform, he mentioned. “The modifications we’re saying right now mirror this centered roadmap.”
Irvine, California-based Rivian, which has about 14,000 staff, will let go of about 840 workers in a transfer that won’t have an effect on manufacturing operations at its plant in Regular, Illinois.
Rivian, which has been shedding cash on each car it builds, narrowly missed its full-year manufacturing goal of 25,000 automobiles final yr because it handled supply-chain disruptions brought on by the COVID-19 pandemic. It had beforehand halved that focus on.
To additional preserve its money, Rivian late final yr shelved plans to construct supply vans in Europe with Mercedes. Rivian had earlier pushed again by a yr to 2026 the deliberate launch of a smaller R2 car household on the $5 billion plant it’s constructing in Georgia.
Final July, Rivian, which is scheduled to report fourth-quarter outcomes on Feb. 28, laid off workers and suspended some packages as a part of a broader restructuring.
The corporate has a market valuation of $17.8 billion. Its money and money equivalents stood at $13.27 billion as of Sept. 30, 2022, down from over $18 billion a yr earlier.
