SAN FRANCISCO — Rivian Cars is laying off 6% of its workforce in a bid to cut costs as the electric vehicle maker, already struggling with dwindling cash reserves, prepares for an industry-wide price war .
RJ Scaringe CEO said in an email to employees Wednesday announcing the job cuts, the company is focusing resources on ramping up vehicle production and achieving profitability. Reuters obtained a copy of the email.
The layoffs at Rivian come amid falling electric vehicle prices that began with recent cuts led by Elon Musk Tesla And Ford Engine company
The price cuts by Tesla and Ford are expected to affect electric vehicle startups like Rivian, lucid Group and British startup, Arrival, on Monday said they would lay off half of their staff.
Despite a hugely successful initial public offering in November 2021, shares of Rivian were down nearly 90% from that month’s peak through Tuesday’s close. Shares of Rivian traded down 4% on Nasdaq on Wednesday, offsetting some of the losses following news of job cuts.
“We must focus our resources on our ramp and path to profitability,” Scaringe said in an email, in which he apologized to employees for the need for the cuts.
A Rivian spokesman confirmed the email had been sent, but declined to comment further.
‘Bloody cash’
“They’re bleeding cash and want to grow at a much faster rate, but they continue to struggle with electric vehicle production and can’t bring down single costs,” said CFRA Research analyst Garrett Nelson. taste in a meaningful way”. “We think that’s what’s behind this decision.”
Rivian is focusing on boosting R1 . production truck and EDV delivery trucks for top shareholder Amazon.com, and also launched the R2 platform, he said. “The changes we’re announcing today reflect this focused roadmap.”
Irvine, California-based Rivian, which has about 14,000 employees, will lay off about 840 employees in a move that will not affect production at its plant in Normal, Illinois.
Rivian, which is losing money on every car it builds, nearly missed its target of 25,000 full-year production last year as it coped with supply chain disruptions caused by the COVID-19 pandemic. cause. It previously halved that target.
To further save its cash, Rivian late last year shelved plans to build delivery trucks in Europe with Mercedes. Rivian previously pushed back a year to 2026 to launch the smaller R2 at the $5 billion plant it is building in Georgia.
Last July, Rivian, scheduled to report fourth-quarter results on February 28, laid off staff and suspended some programs as part of a broader restructuring.
The company has a market valuation of $17.8 billion. Its cash and cash equivalents stood at $13.27 billion as of September 30, 2022, down from more than $18 billion a year earlier.
