Rivian Automotive Inc., a manufacturer of electric trucks, announced on Wednesday that it was reducing its headcount by 6% in order to optimize costs in a tightening macroeconomic environment. The automaker stated that the economy had made it more difficult for it to raise money to increase production and that it wanted to streamline its product plans.
According to earlier reports, Rivian planned to lay off about 5% of its workers; however, the actual percentage is now higher. In a memo to employees that RJ Scaringe, the company's CEO, sent, Rivian acknowledged the layoffs. He said that Rivian's capacity to raise capital has been hampered by rising interest rates, soaring inflation, and increased commodity prices.
"We need to be able to continue to grow and scale without additional financing in this macro environment." he wrote. ''
"To achieve this, we have simplified our product roadmap and focused on where it is most impactful to deploy capital," he added.
According to an email addressed to staff members by CEO RJ Scaringe, personnel on the factory operations team in Normal, Illinois, won't be impacted. He expressed regret to those being let go. "To those leaving Rivian, I am genuinely sorry," he stated.
According to the earlier story, insiders with knowledge of the situation told Bloomberg that Rivian had expanded too quickly in some sectors, echoing Tesla's own justification for laying off about 3% of its workers. Rivian added that teams with duplicate functions would be included in the "non-manufacturing positions" that would be affected by the job reduction.
The carmaker reported earlier this month that during Q2 2022, 4,401 automobiles were made in Normal, Illinois. It intends to produce at least 25,000 cars this year. The business claimed that these results continue to meet its expectations and that it is on pace to meet its objective.
The company will prioritize improving R1 and EDV (electric delivery van) over the following 18 months and hurriedly developing and releasing R2 and subsequent platforms.
The company, according to Scaringe's email, is in a strong financial position, but in order to reach its full potential, its strategy must enable sustained growth as it moves closer to profitability.
As of Dec. 31, 2021, Rivian had approximately 10,000 employees worldwide, per the company's filing. The corporation ended the first quarter with US$16 billion in cash.
On August 11, Rivian will conduct its Q2 2022 earnings call.