EV Price Prompts Rivian To Downsize Workforce By 6%

Rivian Automotive, a manufacturer of electric trucks, has decided to lay off 6% of its workforce to battle a weak economy in an effort to save money as it prepares for a potential price war across the entire industry.

Its CEO, RJ Scaringe, stated that increasing operating efficiency must be a "core objective" in an email to staff members.

Around 840 jobs will be cut as a result of this move as the California-based startup currently employs 14,000 people.

"We must focus our resources on ramp and our path to profitability," penned Scaringe in the email, according to Reuters. He also apologised to his staff for the decision.

The company's assembly factory in Illinois, where the push is being made to help increase production, will not be impacted by the layoffs. This is the same company that operates on two shifts and has already produced 200 vehicles in a single day, which is a record.

Rivian had a difficult but successful year in 2022. However, due primarily to supply chain issues, the firm recently missed its updated production target for 2022 of 25,000 vehicles. Out of that, 20,332 were delivered to customers, and 24,337 were "factory gated."

Despite working to reduce production costs, the company continues to lose money on each new vehicle it produces and is, in the words of analysts, "bleeding cash". In addition to developing its upcoming smaller R2 vehicle platform, the company is concentrating on increasing production of its R1 trucks and the EDV delivery vans it makes for Amazon.

A looming price war that could soon have an impact on the electric vehicle market makes its high production costs even more damaging. Aptly, the recent departures of senior employees are complicating matters for the business. In 2022, the company also lost key executives in parts procurement, strategy, and engineering.