EV Maker Rivian To Cut 6% Of Jobs Amid Price War -Internal Memo

Rivian Automotive is laying off 6% of its workforce in an effort to reduce costs as the EV maker, now grappling with falling hard cash reserves and a weak overall economy, braces for an marketplace-wide cost war.

The business is focusing methods on ramping up vehicle output and reaching profitability, Main Govt R.J. Scaringe said in an email to staff members on Wednesday asserting the career cuts. Reuters obtained a copy of the electronic mail.

Layoffs at Rivian appear amid slipping EV rates kicked off by cuts produced recently by Elon Musk-led Tesla and Ford Motor Co.

The selling price cuts by Tesla and Ford are predicted to hurt EV upstarts such as Rivian, Lucid Team and British startup Arrival, which Monday claimed it would lay off half its staff.

Irrespective of a blockbuster original general public presenting in November 2021, Rivian’s shares have fallen virtually 90% from their peak that thirty day period to Tuesday’s near. Rivian’s stock was investing down 4% on Nasdaq on Wednesday, paring some losses just after information of the position cuts.

“We have to concentration our means on ramp and our route to profitability,” Scaringe explained in the e-mail, in which he apologized to workforce for the requirement of the cuts.

A Rivian spokesman verified the e mail was despatched, but declined even further comment.

‘BLEEDING CASH’

“They are bleeding income and would like to expand at a significantly faster charge, but they keep on to wrestle with their EV creation ramp and have been unable to meaningfully travel down device fees,” CFRA Study analyst Garrett Nelson claimed. “We assume that is what’s at the rear of this selection.”

Rivian is focusing on ramping up generation of its R1 vehicles and EDV delivery vans for top shareholder Amazon.com, and launching its R2 platform, he stated. “The improvements we are saying right now replicate this concentrated roadmap.”

Irvine, California-primarily based Rivian, which has about 14,000 workforce, will enable go of about 840 staff in a go that will not have an affect on manufacturing functions at its plant in Usual, Illinois.

Rivian, which has been losing dollars on each and every automobile it builds, narrowly missed its total-yr manufacturing target of 25,000 cars previous yr as it dealt with supply-chain disruptions triggered by the COVID-19 pandemic. It experienced beforehand halved that focus on.

To more conserve its money, Rivian late previous year shelved plans to develop delivery vans in Europe with Mercedes. Rivian experienced earlier pushed back again by a 12 months to 2026 the prepared start of a smaller R2 vehicle family members at the $5 billion plant it is building in Ga.

Previous July, Rivian, which is scheduled to report fourth-quarter effects on Feb. 28, laid off team and suspended some plans as component of a broader restructuring.

The enterprise has a current market valuation of $17.8 billion. Its funds and hard cash equivalents stood at $13.27 billion as of Sept. 30, 2022, down from around $18 billion a yr before.