Rivian, the buzzy EV automaker that had one of the biggest IPOs in 2021, is cutting 6% of its workforce for the second time in less than a year, according to an internal memo sent to employees today by founder and CEO RJ Scaringe.
Reuters was the first to report about the cuts. TechCrunch has also viewed the leaked memo. A Rivian spokesperson confirmed the layoffs.
The memo comes six months since Rivian initiated its first layoffs. In July, Rivian cut 6% of its roughly 14,000-person workforce as the company attempted to get ahead of macroeconomic headwinds caused by rising inflation, interest rates and commodity prices.
Manufacturing jobs at the company’s Normal, Illinois factory will not be impacted, according to the memo sent Wednesday. The cuts are aimed at lowering Rivian’s operational costs amid a weakening economy and pricing pressure from Tesla and other automakers.
“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 in the memo. “In 2022, we took steps to focus our product portfolio and drive a lower cost structure. 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. This includes the continued ramp of R1 and EDV production as well [as] the launch of our high-volume R2 platform. The changes we are announcing today reflect this focused roadmap.”
Tesla, the EV sales leader that has one of the higher profit margins in the sector, has discounted its vehicles, or offered credits, at least four times in the past several months, kicking off what many in the industry have dubbed an EV price war. Ford recently followed Tesla’s lead, forcing other automakers to consider making the same move or risk seeing a drop in sales.
Sales of Rivian’s premium all-electric R1T truck and R1S SUV could drop if consumers turn to other lower-priced options. Ford has not lowered the price of its F-150 Lightning truck, giving Rivian a reprieve for now.
Comment