Rivian, an E.V. startup, is taking extraordinary steps to increase its profitability. The company is laying off a small number of its employees. But this year’s second wave of layoffs highlights how bad things are for the company, and also reflects the broader challenges faced by the electric vehicle market.
In a strategic move, Rivian Layoffs indicated in February that 10% of its salaried employees would be laid off after its fourth-quarter and full-year 2024 results were released. This is part of the company’s plan to boost profitability and reduce employees by an extra 1% by the end of this year.
The company stated, “We continue to work to optimize the business and achieve alignment with our goals.” In this article, we learn more about the layoffs at Rivian.
DiscontinuedNews is impartial and independent, and every day, we create distinctive, world-class programs, news, and content that inform, educate and entertain millions of people worldwide.
What happened to Rivian?
Rivian Automotive, in response to falling cash reserves and a sluggish economy, has taken proactive steps to reduce costs. The company, aware of the industry-wide pricing war, is bracing itself and making necessary adjustments to stay competitive in the market.
The company, under the leadership of Chief Executive R.J. Scaringe, is resolute in its plans to focus resources on increasing vehicle production and achieving profitability. Despite the job losses announced in an email to staff on January 31, 2023, the company remains optimistic about its future.
Rivian layoffs coincide with price drops by Elon Musk-led Tesla and Ford Motor Co. for electric vehicles. Despite a massive initial public offering in November 2021, Rivian’s stock has fallen nearly 90% from its peak at the end of January 2023. The news of the employment layoffs further impacted the company’s stock, which went down 4%.
Garrett Nelson, an analyst at CFRA Research, stated:
“They’re losing cash and would like to expand at a much faster rate. But they are still struggling with their E.V. production ramp. They have not been able to meaningfully drive down unit costs. We feel that is what’s behind this action.”
Rivian plans to increase manufacturing of its R1 vehicles and EDV delivery vans for its top shareholder, Amazon.com. This strategic move is part of the company’s efforts to meet the growing demand for electric vehicles and strengthen its relationship with key stakeholders. The CEO stated, ‘The modifications we made public today reflect this focused roadmap.’
Rivian, headquartered in Irvine, California, plans to lay off around 840 people in 2023. This was done to maintain production operations at its Normal, Illinois, plant.
Rivian Layoffs 2024
Almost 75,000 tech workers will have lost their jobs by 2024. Google and Rivian continue to lay off jobs, with both companies lately reducing their workforces even further. This is part of a broader trend of layoffs in the tech sector this year.
Rivian reduced approximately 1% of its workforce. It comes just two months after the firm laid off 10% of its staff due to
- decreasing demand for its vehicles (and electronic vehicles in general) and
- a lower-than-expected production forecast for 2024.
Rivian’s issues began in February when the company released its fourth-quarter earnings for 2023. The company informed investors that it was down $1.5 billion during the three-month period, coinciding with the layoffs’ release. At the time, it had 16,700 employees. However, how many of those were considered salaried needed to be made clear. Thus, it is difficult to determine the total number of people affected at the time.
Rivian’s second wave of layoffs
This year, Rivian’s second round of layoffs affects a small percentage of the staff. But it highlights the severity of the issue.
As previously stated, Rivian indicated in February that 10% of its salaried employees would be released upon its fourth-quarter and full-year 2024 earnings. To boost profitability, the company intends to reduce employment by an additional 1% by the end of this year.
During a recent media call, Rivian’s CEO, R.J. Scaringe, discussed the layoffs. He explained that this choice was made to ‘optimize the impact we can have as a company.’ Scaringe also stated that Rivian is ‘not exempt from current economic and geopolitical risks.’ The company remains committed to its long-term growth plans and is taking necessary steps to navigate the current market conditions.
Also, the E.V. startup outpaced expectations, delivering 13,588 units in the first quarter. However, in order to improve, the business has halted production at its Normal, Illinois, location. By the end of the year, it hopes to ‘effectively reduce ‘ material prices. The company is implementing a range of cost-cutting measures and efficiency improvements to enhance its financial performance and achieve its profitability targets.
Scaringe believes that “an entire host of changes” will result in a “severe cost reduction” for the R1S and R1T.
It is important to note that Rivian recorded a $43,372 loss per vehicle manufactured in the fourth quarter. Despite these losses, the E.V. company has improved the plant. Also, it expects to achieve a modest gross profit in the fourth quarter of 2024. The company’s decision to lay off employees is part of its strategy to reduce costs and improve its financial performance.
Still, Rivian has announced additional job layoffs. This news came following Tesla’s recent decision to downsize its global workforce by more than 10%.
Conclusion
Rivian Automotive Inc. was formerly regarded as the electric vehicle market’s darling. However, it has notified state officials that it plans to lay off more employees in California. In an April 24 letter to the state’s Employment Development Department, Scott Griffin stated that the company would lay off more than 120 employees. This includes 89 in Irvine and 28 in Palo Alto.
Griffin stated that job losses will begin in June and will be permanent. ‘This was a difficult choice. But it was necessary to promote our goal of being gross margin positive by the end of the year,’ said the spokesperson. The company is committed to maintaining open and transparent communication with its employees and stakeholders during this challenging time.
Rivian’s recent events are part of a more significant crisis for E.V. manufacturers, which have recently seen a decline in demand. It’s because most more affluent customers already own an E.V., and the rest of the market is still hesitant.
Read More:
Netlify Layoffs 2024 – Sad News For Netlify developers
Is Nordic consulting Layoffs in 2024?
Sotheby’s layoffs 2024 – Why Sotheby’s cut jobs of employees?