Another tranche of job losses for Rivian Automotive, after it says it is laying off 6 percent of its workforce
Electric vehicle (EV) start-up Rivian Automotive has added to the surge of job losses within the tech and EV sector.
Reuters reported that the EV maker is laying off 6 percent of its workforce in an effort to cut costs, as it confronts falling cash reserves and a weak economy, coupled with a looming industry price war.
Rivian is currently focusing its resources on ramping up vehicle production and reaching profitability, chief executive R.J. Scaringe reportedly said in an email to employees on Wednesday announcing the job cuts.
Reuters obtained a copy of the email.
Reuters noted that the Tesla and Ford EV price cuts are expected to hurt EV startup such as Rivian, Lucid Group and British startup Arrival, which Monday said it would lay off half its staff.
“We must focus our resources on ramp and our path to profitability,” Scaringe said in the email, in which he apologised to employees for the necessity of the cuts.
A Rivian spokesman confirmed to Reuters the email was sent, but declined further comment.
“They’re bleeding cash and would like to grow at a much faster rate, but they continue to struggle with their EV production ramp and have been unable to meaningfully drive down unit costs,” CFRA Research analyst Garrett Nelson was quoted as saying. “We think that is what’s behind this decision.”
Rivian is based in Irvine, California, and has about 14,000 employees.
According to Reuters it will let go of about 840 staff, in a move that will not affect manufacturing operations at its plant in Normal, Illinois.
It should be remembered that this is now the second round of layoffs.
Rivian listed in New York in November 2021 for $105 billion (£95bn), before having produced its first vehicle.
Since that time Rivian’s shares have fallen nearly 90 percent from their peak that month to Tuesday’s close, amidst production and supply chain problems that cause it to slash its annual production forecast from 50,000 to 25,000 in March.
Rivian’s stock was trading down 4 percent on Nasdaq on Wednesday.
Rivian is focusing on ramping up production of its R1 trucks and EDV delivery vans for top shareholder Amazon.com and launching its R2 platform, Scaringe said. “The changes we are announcing today reflect this focused roadmap.
Rivian, which has been losing money on every vehicle it builds, narrowly missed its full-year production target of 25,000 vehicles last year as it dealt with supply-chain disruptions caused by the Covid-19 pandemic.