SAN FRANCISCO — Rivian Automotive is shedding 6% of its workforce in an effort to chop prices because the EV maker, already grappling with falling money reserves, braces for an industry-wide value conflict.
The corporate is focusing assets on ramping up automobile manufacturing and reaching profitability, Chief Government R.J. Scaringe stated in an electronic mail to workers on Wednesday saying the job cuts. Reuters obtained a replica of the e-mail.
Layoffs at Rivian come amid falling EV costs kicked off by cuts made lately by Elon Musk-led Tesla and Ford Motor Co.
The worth cuts by Tesla and Ford are anticipated to harm EV upstarts corresponding to Rivian, Lucid Group and British startup Arrival, which Monday stated it might lay off half its workers.
Regardless of a blockbuster preliminary public providing in November 2021, Rivian’s shares have fallen almost 90% from their peak that month to Tuesday’s shut. Rivian’s inventory was buying and selling down 4% on Nasdaq on Wednesday, paring some losses after information of the job cuts.
“We should focus our assets on ramp and our path to profitability,” Scaringe stated within the electronic mail, wherein he apologized to workers for the need of the cuts.
A Rivian spokesman confirmed the e-mail was despatched, however declined additional remark.
‘Bleeding money’
“They’re bleeding money and want to develop at a a lot quicker fee, however they proceed to wrestle with their EV manufacturing ramp and have been unable to meaningfully drive down unit prices,” CFRA Analysis analyst Garrett Nelson stated. “We expect that’s what’s behind this determination.”
Rivian is specializing in ramping up manufacturing of its R1 vans and EDV supply vans for prime shareholder Amazon.com, and launching its R2 platform, he stated. “The modifications we’re saying as we speak mirror this centered roadmap.”
Irvine, California-based Rivian, which has about 14,000 workers, will let go of about 840 workers in a transfer that won’t have an effect on manufacturing operations at its plant in Regular, Illinois.
Rivian, which has been shedding cash on each automobile it builds, narrowly missed its full-year manufacturing goal of 25,000 autos final 12 months because it handled supply-chain disruptions attributable to the COVID-19 pandemic. It had beforehand halved that focus on.
To additional preserve its money, Rivian late final 12 months shelved plans to construct supply vans in Europe with Mercedes. Rivian had earlier pushed again by a 12 months to 2026 the deliberate launch of a smaller R2 automobile household on the $5 billion plant it’s constructing in Georgia.
Final July, Rivian, which is scheduled to report fourth-quarter outcomes on Feb. 28, laid off workers and suspended some applications as a part of a broader restructuring.
The corporate has a market valuation of $17.8 billion. Its money and money equivalents stood at $13.27 billion as of Sept. 30, 2022, down from over $18 billion a 12 months earlier.
