Start the electric car Rivian are cutting back moving forward and more information will be revealed by the end of the week.
In a letter sent to employees, and seen by Carscoops and ReutersRJ Scaringe CEO said the automaker is making changes, including “prioritizing certain programs (and stopping some programs), pausing some non-product hiring activities, manufacturing and applying major cost reduction efforts to reduce raw material expenditure and operating costs”.
Those priorities include improving production of the R1T and R1S SUV models, finalizing an upcoming EDV delivery truck for Amazon, and developing the smaller R2 family of vehicles.
He went on to say that the automaker is “not immune to the current economic circumstances” and that “every decision about our team is being evaluated through the lens of our strategic priorities, not a simple mechanism to reduce costs.”
Sources have said Bloomberg Rivian will cut up to 5% of its current workforce of 14,000. If that number proves to be accurate, up to 700 people could lose their jobs early.
The company scheduled a hand-in-hand meeting with employees on Friday morning (US time) to outline its cost-cutting measures.
Rivian has doubled its staff over the past year as it expanded production of the R1T and R1S at the former Mitsubishi plant it owned in Normal, Illinois.
It is also building a second factory in Georgia. Priced at around US$5 billion ($7 billion), the new factory is slated to open in 2025 and will build the company’s R2 range.
Scaringe claims the company is “in good financial standing” with a “strong” outlook. The company said that by the end of the first quarter of 2022, it had $16 billion ($23 billion) in cash.
Last quarter, the automaker posted a loss of $1.59 billion ($A2.32 billion) and is likely to stay in the red until production, and therefore, sales surge. .
The company launched the R1T pickup truck last year and the R1S SUV, both of which have been well received in the media. However, like Tesla in the early days of the Model 3, Rivian has struggled with ramping up production.
Rivian says it is now on track to meet its goal of producing 25,000 vehicles by 2022. It had previously planned to produce twice that number, but has blamed supply chain constraints for the failure. can reach that number.
Like a number of other manufacturers, Rivian has also raised prices for its vehicles. In March, it raised prices by about 17% on both new and existing pre-orders.
Public outcry led by placeholders forced the company to back down, with Scaringe being forced into a winding stretch of road where he admits Rivian “broken trust” with customers mine.
Rivian’s production struggles have worried investors. At the time of writing, the company’s stock is trading at $30.57 ($44.07), well above its peak of $179.47 ($A260.84). it reached in November 2021.
Rival Tesla is also cutting its workforce. Based on Reutersthe company is closing its Autopilot development office in San Mateo, California.
This will reduce the company’s 229 employees. CEO Elon Musk has previously told managers at the company that he has “extremely bad feelings” about the company and said the automaker should reduce its headcount by up to ten%.