CEO and founder RJ Scaringe informed staff today that the electric vehicle (EV) manufacturer will be laying off 6% of its workers for the second time in less than a year.
Reuters was the first to report on the cutbacks. The message comes six months after Rivian launched its first layoffs. To combat the macroeconomic challenges brought on by increasing inflation, interest rates, and commodity prices, Rivian laid off 6% of its nearly 14,000-person staff in July.
The company’s Normal, Illinois facility will not lose any manufacturing employees, according a message given out on Wednesday. With the economy slowing and price competition from Tesla and other manufacturers increasing, Rivian has decided to implement these adjustments to save operating expenses.
Scaringe stated in the email, “To deliver over the long-term, we must concentrate our efforts on ramp and our route to profitability while ensuring we have the proper collection of future goods, services, and technology that will continue to defy convention.” In 2022, we started action to streamline our product line and save costs. Achieving our long-term goal of sustained financial success necessitates that we focus our efforts, investments, and resources where they will have the most effect. This covers the continuous ramp of R1 and EDV manufacturing as well the debut of our high-volume R2 platform. The adjustments we are announcing today reflect this targeted roadmap.”
At least four times over the last six months, Tesla—the EV sales leader with one of the better profit margins in the sector—has reduced its cars or issued credits, sparking what many in the industry are calling an EV pricing war. Ford has followed Tesla’s example, prompting other manufacturers to consider making the same step or risk witnessing a reduction in sales.
Sales of Rivian’s premium all-electric R1T truck and R1S SUV might plummet if buyers switch to alternative lesser cost choices. For the time being, Rivian is safe from competition since Ford has not reduced the price of its F-150 Lightning pickup.
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