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        home > news > Automakers > Rivian to Lay Off 6% of Workforce to Fight Rising Costs

        Rivian to Lay Off 6% of Workforce to Fight Rising Costs

        Move designed to focus resources on meeting production targets.

        Michael Strong
        Michael Strong , Managing Editor
        July 28, 2022

        EV startup Rivian Automotive plans to lay off 6% of its workforce, telling its 14,000 employees about the move in an email Wednesday from founder and CEO R.J. Scaringe.

        RJ Scaringe talking
        Rivian founder and CEO RJ Scaringe told employees in an email the company will layoff about 6% of its workforce to cut costs.

        The move, reported by the Wall Street Journal, is designed to help offset rising costs due to inflationary pressures. It’s also higher than the 5% Bloomberg News reported earlier this month. 

        The goal is to ensure the company can expand its manufacturing capabilities without additional costs it cannot afford. Additionally, the cuts are likely to come from areas outside of the company’s manufacturing operations, located in a former Mitsubishi plant in Normal, Illinois.

        “Over the last six months, the world has dramatically changed with inflation reaching record highs, interest rates rapidly rising and commodity prices continuing to climb—all of which have contributed to the global capital markets tightening,” Scaringe wrote in the email sent to employees, according to the Journal.

        TheDetroitBureau’s attempts to contact Rivian have not yet been returned.

        Rivian doors at Normal plant
        Rivian surpassed analysts estimates, producing 4,401 vehicles in Q2, but needs to ensure it hits its stated production numbers.

        Warning received

        The move shouldn’t come as a surprise as Scaringe sent out an email earlier this month, suggesting these reductions were coming. It also came as the company began delivering its first round of electric delivery vans for top investor Amazon.

        Scaringe told employees in the previous email, “Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably.”

        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 a $5 billion facility.

        However, the company’s looking at the long-term impact of its hiring and stopped adding non-manufacturing hires 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.

        Rivian EDVs in production
        Rivian will produce 25,000 vehicles in 2022, Scaringe confirmed.

        Rebounding after a tough start

        The moves center on marshalling the resources necessary to ensure the company meets its publicly stated production targets. Production got off to a slow start last fall, forcing the EV maker scale back its initial projections.

        However, Rivian officials told shareholders 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. 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.

        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 R.J. Scaringe said in March the company was targeting production of 55,000 vehicles. 

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