SAN FRANCISCO, Feb. 1 (Reuters) – Rivian Automotive Company (Revno) It is laying off 6% of its workforce in a bid to cut costs as the electric car maker, already suffering from low cash reserves and a weak economy, prepares for an industry-wide price war.
In an email to employees Wednesday announcing the job cuts, CEO RJ Scaringe said the company is focusing resources on increasing vehicle production and reaching profitability. Reuters obtained a copy of the email.
Rivian’s layoffs come amid a slump in electric vehicle prices that was triggered by Elon Musk’s recent cutbacks. Tesla (TSLA.O) And Ford Motor Company (FN).
Tesla and Ford price cuts are It is expected to hurt the EV Startups like Rivian and Lucid Group (LCID.O) The British startup will arrive on Monday He said It will lay off half of its employees.
Despite a massive initial public offering in November 2021, Rivian shares are down nearly 90% from their peak that month as of Tuesday’s close. Rivian stock traded down 4% on the Nasdaq on Wednesday, clawing back some losses after news of the job cuts.
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“We must focus our resources on the ramp and our path to profitability,” Scaringi said in the email in which he apologized to employees for the necessity of the cuts.
A Rivian spokesperson confirmed the email was sent, but declined to comment on further information.
“cash hemorrhaging”
“They’re hemorrhaging money and would like to grow at a much faster rate, but they continue to struggle with their electric vehicle production ramp and haven’t been able to meaningfully lower unit costs,” said Garrett Nelson, CFRA Research analyst. “We believe this is the reason behind this decision.”
Rivian is focused on ramping up production of its R1 trucks and EDV delivery vans for major shareholders Amazon.com (AMZN.O), and launching its own 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 840 employees in a move that will not affect manufacturing operations at its Normal, Illinois, plant.
Rivian, who was lose money On every vehicle made, narrowly miss It set a full-year production target of 25,000 vehicles last year as it dealt with supply chain disruptions caused by the COVID-19 pandemic. He had cut that target in half previously.
To further maintain cash flow, Rivian late last year Shelved plans To build delivery trucks in Europe with Mercedes (MBGn.DE). Rivian had earlier delayed by 2026 the planned launch of a smaller family of R2 vehicles at the $5 billion plant it is building in Georgia.
Last July, Rivian, which is due to report its fourth-quarter results on February 28, Layoffs Some programs have been suspended as part of a broader restructuring.
The company has a market capitalization of $17.8 billion. Cash and cash equivalents reached $13.27 billion as of September 30, 2022, down from more than $18 billion a year earlier.
Reporting by Akash Sriram in Bengaluru and Abhrup Roy in San Francisco Editing by Ben Kleiman and Nick Zieminski
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