SAN FRANCISCO (Reuters) – Rivian Automotive (RIVN.O) is shedding 6% of its workforce in an effort to chop prices as the electrical automobile maker, already fighting low money reserves and a weak economic system. All-out value battle.
In an e-mail to staff Wednesday saying the job cuts, CEO RJ Scaringe mentioned the corporate is focusing sources on growing automobile manufacturing and reaching profitability. Reuters obtained a duplicate of the e-mail.
Rivian’s layoffs come amid falling electrical automobile costs which were triggered by current cuts by Elon Musk-led Tesla (TSLA.O) and Ford Motor Co (FN).
The worth cuts by Tesla and Ford are anticipated to harm EV startups reminiscent of Rivian and Lucid Group (LCID.O) and British firm Entry, which mentioned Monday it might lay off half of its workers.
Regardless of an enormous preliminary public providing in November 2021, Rivian shares are down practically 90% from their peak that month as of Tuesday’s shut. Rivian inventory traded down 4% on the Nasdaq on Wednesday, recouping some losses after information of the job cuts.
Newest updates
View 2 extra tales
“We should focus our sources on the ramp and our path to profitability,” Scaringi mentioned within the e-mail during which he apologized to staff for the need of the cuts.
A Rivian spokesperson confirmed the e-mail was despatched, however declined to remark.
“money hemorrhaging”
“They’re hemorrhaging cash and want to develop at a a lot quicker fee, however they proceed to battle with their electrical automobile manufacturing ramp and have not been capable of meaningfully decrease unit prices,” mentioned Garrett Nelson, CFRA Analysis analyst. “We imagine that is the rationale behind this determination.”
He mentioned Rivian is targeted on ramping up manufacturing of its R1 vehicles and EDV supply vans for largest shareholder Amazon.com (AMZN.O), and launching its personal R2 platform. “The adjustments we’re saying immediately replicate this centered roadmap.”
Irvine, California-based Rivian, which has about 14,000 staff, will lay off 840 staff in a transfer that won’t have an effect on manufacturing operations at its Regular, Illinois, plant.
Rivian, which has been dropping cash on each automobile it makes, narrowly missed its full-year manufacturing goal of 25,000 automobiles final 12 months because it handled provide chain disruptions brought on by the COVID-19 pandemic. He had reduce that focus on in half beforehand.
To additional save its cash, Rivian late final 12 months halted plans to construct supply vans in Europe with Mercedes (MBGn.DE). Rivian had earlier delayed by 2026 the deliberate launch of a smaller household of R2 automobiles on the $5 billion plant it’s constructing in Georgia.
Final July, Rivian, which is scheduled to report fourth-quarter outcomes on February 28, laid off staff and suspended some packages as a part of a broader restructuring.
The corporate’s market capitalization is $17.8 billion. Money and money equivalents reached $13.27 billion as of September 30, 2022, down from greater than $18 billion a 12 months earlier.
Reporting by Akash Sriram in Bengaluru and Abhrup Roy in San Francisco Modifying by Ben Kleiman and Nick Zieminski
Our Requirements: The Thomson Reuters Belief Ideas.
