Rivian Automotive announced Wednesday that it will lay off 6% of its workforce as it seeks to cut costs while increasing production in the increasingly competitive EV market.
CEO RJ Scaringe notified employees of the layoffs in an email obtained by Fox Business, in which he said he “deeply apologizes” for the job cuts.
“For long-term results, we need to focus our resources on the road to launch and profitability while ensuring we have the right future products, services and technologies that continue to challenge business as usual,” Scaringe said. There is,” he wrote. “Continuing to improve operational efficiencies on the road to profitability is a key goal and requires us to focus our investments and resources on the most impactful parts of our business.”
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Headquartered in Irvine, California, Rivian had approximately 14,000 employees before layoffs, and a 6% reduction would mean laying off approximately 840 employees. According to Scaringe’s email, the layoffs will not affect manufacturing jobs at his Rivian production facility in Normal, Illinois.
The company continues to lose money on each vehicle it builds and just missed its full-year target of producing 25,000 vehicles in 2022 amid pandemic-related supply chain disruptions. Production targets were previously halved among the challenges it faced.
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Moving forward, Rivian will focus on continuing to expand production of its R1 trucks, in addition to its largest shareholder Amazon’s EDV delivery vans. It’s also moving toward a delayed mass R2 platform launch in 2026, which will be manufactured at a $5 billion facility Rivian is building in Georgia.
Rivian’s cash reserves fell from more than $18 billion a year ago to $13.27 billion on Sept. 30, 2022, prompting the company to lay off staff in July of last year and take some steps to restructure. Paused the program.
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Rivian made a high-profile initial public offering in November 2021, but the company’s share price has fallen about 85% from its peak for the month as of Wednesday.
Rivian’s stock fell about 3% on the NASDAQ following today’s layoff announcement.
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The competitive environment has become tougher for electric vehicle start-ups in recent weeks as Tesla and Ford have slashed the prices of their EVs.
In mid-January, Tesla cut prices on some models by nearly 20%. Ford this week announced price cuts for his Mustang Mach E up to $5,900.
Reuters contributed to this report.