Electric carmaker Rivian said on Wednesday that it will be cutting 10% of its salaried workforce as it deals with slowing EV demand.
The company made the announcement in its 2023 fourth quarter earnings call on Wednesday.
The Q4 financial report also revealed that despite making and delivering twice as many EVs in 2023 as in 2022, the company still saw a $5.4 billion loss for the year.
And for 2024, Rivian expects to produce around the same number of vehicles — about 57,000 — as it did in 2023. That’s much lower than the 80,000 vehicles that analysts forecasted the company would be producing in 2024, according to Bloomberg.
Rivian CFO Claire McDonough said during the company’s earnings call that Rivian anticipates consumer and commercial vehicle deliveries to “grow by low single digits” in 2024.
In an email to Business Insider, Rivian did not specify exactly how many salaried staff members would be cut, but said that it has 16,700 total employees, including both salaried and hourly workers.
This is the company’s third round of layoffs in the last year and a half — it cut 6% of its staff in February 2023 and another 6% in July 2022, Business Insider previously reported.
“Rivian, like other automakers, is facing the music of economic uncertainty, consumers’ waning enchantment with EVs, and strict federal tax credit rules,” Insider Intelligence senior analyst Jacob Bourne said.
“The luxury-end of the EV market is becoming saturated and so Rivian knows its best bet is to aim for greater affordability, Bourne added. “The question is whether its upcoming R2 SUV will hit the sweet spot for EV shoppers this year. While it seeks to boost sales, layoffs and a decline in battery metal prices could release the pressure valve.”
The carmaker is one of many to cut costs amid slowing demand. Last year, both Ford and General Motors scaled back their EV plans. Dealers have been warning of slowing demand. High interest rates and a price war with Tesla have put pressure on the EV market.
“Our business is not immune to existing economic and geopolitical uncertainties,” Scaringe said on Wednesday. “Most notably the impact of historically high interest rates which has negatively impacted demand.”
In his email to staff on Wednesday, the CEO told workers they would be notified of layoffs via a calendar invitation on Thursday morning.
“We know the timing here is difficult — waiting between now and tomorrow to understand whether you’re impacted is far from ideal, but we want to ensure a considerate notification process that accommodates all time zones,” Scaringe wrote.
Here’s the full email that Rivian CEO RJ Scaringe sent out to staff on Wednesday, announcing that layoffs would be coming on Thursday.
Hi Team,
Team changes are the hardest decisions I have to make as CEO. I have some difficult news to share. Tomorrow, we’re reducing our salaried employees by approximately 10% along with a limited number of non-manufacturing hourly employees. I want to give you some additional context on how we came to this decision.
Our business is facing a challenging macroeconomic environment—including historically high interest rates and geopolitical uncertainty—and we need to make purposeful changes now to ensure our promising future. We must strategically prioritize our growth areas of the business, including the launch of Peregrine and R2 as well as investing in our go-to-market capabilities. We’ve recently implemented several organizational and leadership changes, but we need to do more to achieve our strategic priorities.
Tomorrow, February 22, employees who are impacted will receive a calendar invite between 7:30 and 8 a.m. PT for a 1:1 meeting with their manager later that same morning. We know the timing here is difficult – waiting between now and tomorrow to understand whether you’re impacted is far from ideal, but we want to ensure a considerate notification process that accommodates all time zones. We will be doing everything we can to support our impacted colleagues through the separation process, including severance, eligibility for Rivian-paid COBRA benefits coverage and access to job placement services. Also, anyone impacted tomorrow will still be eligible for our FY’23 bonus.
I recognize saying goodbye to friends and colleagues isn’t easy. I’m thankful for everyone’s contributions, and for those who leave us, I want to thank you deeply for everything you’ve done for Rivian, and for what you’ve done to advance our mission.
RJ
