NORMAL, Illinois – Electric vehicle company Rivian has announced that it will be laying off 10% of its salaried workforce, in addition to cutting a limited number of non-manufacturing hourly employees, as a part of its cost-cutting measures. The company’s CEO, RJ Scaringe, stated that these measures are necessary due to the increasingly challenging market for electric vehicles. This is the third round of layoffs for Rivian since July 2022, when the company initially cut 6% of its workforce, followed by another 6% in February 2023.
Despite doubling the number of electric vehicles built and shipped in 2023 compared to 2022, Rivian still reported a loss of over $5.4 billion for the year. The company also announced that it only expects to build the same amount of electric vehicles in 2024, with plans to shut down its sole factory in Normal, Illinois midyear for upgrades to improve production rates by about 30%. As a result, Rivian expects to lose around $2.7 billion in 2024, leading to a company-wide cost transformation program that includes layoffs, changes to vehicle design and engineering, and making manufacturing more efficient.
The company’s decision to cut costs and lay off employees also comes after reporting fourth-quarter revenue of $1.3 billion, more than double the revenue generated in the same period of 2022. Additionally, Rivian reported a net loss of $1.5 billion in the fourth quarter, with the company making progress on its loss per vehicle, but still with a considerable way to go before reaching break-even.
The news of layoffs and cost-cutting measures caused Rivian shares to fall more than 15.6% in after-hours trading. Despite the challenges, Scaringe emphasized the company’s commitment to prioritizing growth areas and investing in the launch of new electric vehicles and go-to-market capabilities.
Rivian’s struggles amid the competitive electric vehicle market highlight the challenges faced by companies in the industry, as they navigate production and financial challenges in pursuit of sustainable growth and success.