Despite sales of EVs rising more than 80% in 2021 and tracking to do the same again this year, Tesla and Rivian are going to be cutting employees.
In fact, Tesla CEO Elon Musk already alluded to the fact the company would be reducing its white collar headcount, at least in the short term, by as much as 10 percent. The company made good on that Tuesday, revealing it’s laying off 229 people as it closes an office in San Mateo, California.
The office performed work related to Tesla’s Autopilot semi-autonomous driving technology and will be closed permanently.
Meanwhile, Rivian’s been rumored to be readying for a shake up of its employees and that rumor only got hotter as company founder and CEO R.J. Scaringe reportedly sent employees an email saying he would provide employees about layoffs and suspensions of some programs as part of the changes coming to the EV maker.
Tough times force touch decisions
According to a report from Reuters, Scaringe told employees in the email, “Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably.” The company shared the email with Reuters, the news agency said.
While the company is “financially well positioned,” it’s going to be “prioritizing certain programs (and stopping some.” The company reported it had $16 billion in cash at the end of the first quarter, Scaringe told investors the EV maker had enough money to open its second plant in Georgia in 2025, reportedly at $5 billion facility.
However, the company’s looking at the long-term impact of its hiring, and stopped adding non-manufacturing hires — much like Tesla — and is searching for ways to cut down on expenses as it considers how many employees it needs and tries to be surgical in its cuts, Scaringe suggested in the email, Reuters reported.
It’s not known how many workers will be let go, but Bloomberg News reported the number could be as high as 5% of its workforce, which exceeds 10,000 people. The EV maker has offices in California and a plant in Illinois.
Somewhat surprising
The move comes Rivian told shareholders last week the company built 4,401 vehicles in the second quarter, nearly double its Q1 output and is on track to meet its goal of producing 25,000 electric pickups and SUVs in 2022.
The total beat the projections of many analysts, including RBC Capital Markets, which predicted Rivian would produce just 3,400 vehicles. The company needs to build about 9,000 of its R1T pickups and R1S sport-utility vehicles in each of the next two quarters to hit its production target.
In addition to building more than 4.4K vehicles, it delivered 4,467, which is nearly four times what it did during the first three months of this year. The numbers are less than the original prediction for 2022, which the company cut in half in March after struggling with parts shortages, especially semiconductors, and other issues.
“These figures remain in line with the company’s expectations, and it believes it is on track to deliver on the 25,000 annual production guidance previously provided,” the company said in a statement — the only thing it said in the statement.
Officials said they plan to run two shifts five days a week during the second half of the year to meet its 25K target. Right now, the company runs an intermittent schedule and just one shift.
The company’s plant, a former Mitsubishi site in Normal, Illinois, can build 150,000 vehicles annually. However, officials said the plans call for expanding that capacity to 200,000 units by 2023, although CEO Scaringe said in March the company was targeting production of 55,000 vehicles.
