IRVINE, California: In an effort to cut costs in preparation for an industry-wide price war, electric vehicle manufacturer Rivian Automotive, based in Irvine, California, plans to lay off 6 percent of its workforce.
In an email to employees announcing the job cuts, which was seen by Reuters, Chief Executive R.J. Scaringe said the company is focusing resources on increasing vehicle production and profitability.
Already dealing with declining cash reserves and a weak economy, Rivian, as well as other EV upstarts, such as Lucid and UK company Arrival, are now facing falling EV prices caused by recent cuts by Elon Musk's Tesla, as well as Ford Motors.
"We must focus our resources on ramp up and our path to profitability," added Scaringe, who apologized to employees for the job cuts.
"They are bleeding cash and would like to grow at a much faster rate, but they continue to struggle with their EV production ramp up and have been unable to meaningfully drive down unit costs. We think that is what's behind this decision," noted CFRA Research analyst Garrett Nelson, as quoted by Reuters.
Rivian is prioritizing the production of its R1 trucks and electric delivery vans for top shareholder Amazon.com, and launching its R2 platform, he added, stating, "The changes we are announcing today reflect this focused roadmap."
The company, which has some 14,000 employees, will layoff 840 staff, though its manufacturing operations at its plant in Normal, Illinois, will not be affected.
To further conserve cash, it also abandoning plans for late 2022 to build delivery vans in Europe with Mercedes.
As part of a wider restructuring plan, Rivian, which will report its fourth-quarter results on 28th February, laid off staff and suspended some programs in July 2022.