The 2009-founded electric vehicle automaker is letting go of 6% of its workforce.
Amid talks of a recession in the US, EV automaker Rivian Automotive, Inc. is looking to downsize its workforce by 6%. Founder and CEO RJ Scaringe made the announcement to its 14,000 employees through an email that explained the company's decision to adjust its workforce size because "world has dramatically changed."
According to CNN, 840 of the 14,000 employees at Rivian were told on Wednesday that they were being let go. Scaringe reasoned that there were several factors that led to the decision to enact Rivian layoffs, including inflation, rising interest rates,a nd the increasing prices of commodities.
Rivian to Focus on 'Key Business Priorities' Following Layoffs
Rivian spokesperson Amy Mast explained to The Verge in an email that the Irvine, California based company seeks to align its workforce to their "key business priorities," which included "ramping up the consumer and commercial vehicle programs, accelerating the development of R2 and other future models, deploying our go-to-market programs and optimizing spend across the business."
The Rivian layoffs come right after a report from earlier this month that said company executives were looking to remove jobs that had been added as it scaled up but were not involved in the manufacturing of EV automobiles. Back in November 2021, Raivan raised more than $13.5 billion in financing after its IPO, indicating that it would be a strong competitor to Tesla.
Scaringe sent an email to employees after talks of Rivian layoffs began circulating. The EV company boss explained that they decided to implement changes, such as discontinuing certain projects and halting hiring in non-manufacturing roles to reduce operating costs.
Scaringe added that Rivian had begun "aligning the organization as a whole" to ensure they achieved their objectives. These changes come at a crucial time for the EV automaker, as it just began ramping up production of the R1S luxury SUV R1T pickup, which have been both well received by critics. The pickup was even honored with MotorTrend's Truck of the Year award.
Rivian is also producing the electric delivery van, for which Amazon is both a major investor and primary customer. Scaringe said in this week's email announcing the Rivian layoffs that the company is "financially well positioned" and must ensure strategy to achieve "profitability."
Rivian CEO Apologizes to Departing Employees
In the email to employees about the Rivian layoffs, Scaringe apologized to workers who will lose their jobs and thanked them for their hard work. He also assured them that they would receive14 weeks of regular pay and continued healthcare coverage for the rest of the year.
Rivian is set to release its Q2 earnings report on August 11. While the EV automaker has massive cash reserves, it also lost about $1.59 billion in the last quarter. Several tech companies have reported layoffs and halted hiring amidst dismal second quarter earnings in the face of impending recession in the US, despite experts and government officials' downplaying the warning signs.
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