Rivian is Laying Off 6% of its Workforce, Citing Erratic Economy
It's no secret that everything costs more. Whether it's the chip shortage, global warming, or the war in Ukraine, prices for everything have skyrocketed. Automakers are finding it hard to manufacture vehicles because of the situation and are having to cut costs in any way they can. Rivian is the latest to face a financial crunch and has decided to free up some funds by laying off approximately 6 percent of its workforce.
High Costs Lead To Job Cuts
As Bloomberg reports, Rivian confirmed its cuts in an internal memo from Chief Executive Officer RJ Scaringe. The CEO cited higher interest rates, higher commodity prices, and surging inflation as the reason for the cuts, claiming that they have hurt the company's ability to raise funds.
"We need to be able to continue to grow and scale without additional financing in this macro environment," said Scaringe in the memo. "To achieve this, we have simplified our product roadmap and focused on where it is most impactful to deploy capital."
In an email to The Verge, Amy Mast, a spokesperson for the company, confirmed the news to the outlet, but stated that the decision was a part of the automaker's plan to speed up the development of future variants of its EVs.
"Today we announced the difficult decision to reduce the size of the Rivian team by approximately 6 percent," said Mast. "This decision will help align our workforce to our key business priorities, including ramping up the consumer and commercial vehicle programs, acceleration the development of R2 and other future models, deploying our go-to-market programs and optimizing spend across the business."
Production Remains On Course
The news of job cuts follows an earlier report from Bloomberg that reported Rivian would cut jobs that it added when it was expanding over the past year. The company added more jobs during the past year as a plan to increase production. Now, with the higher prices for materials, Rivian has to cut back on its previous expansion.
For Rivian, the job cuts come at a pivotal time for the automaker. The brand just started to increase how many electric trucks and SUVs it's making for consumers, while also manufacturing more delivery vans for Amazon. According to the brand's most recent earnings report, it has produced approximately 2,550 vehicles and delivered nearly 1,227 of them. Rivian is still aiming to make 25,000 vehicles by the end of the year.
Rivian isn't alone with its plans to lay off a large number of its workforce. Ford was recently contemplating laying off 8,000 workers, while Tesla recently announced plans to cut 10 percent of its employees.
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