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Rivian to cut 10 percent of its salaried staff

By Nithya Bose in Business News, posted February 22, 2024

Rivian Automotive has announced a reduction of 10 percent in its salaried workforce amid challenging market conditions.

The company, known for its electric trucks, expects its vehicle production to remain steady this year, targeting the same output as in 2023, which was around 57,000 vehicles.

This projection falls short of the anticipated 65,000 vehicles predicted by analysts.

Rivian's CEO, RJ Scaringe, attributed the decision to “challenging macroeconomic conditions,” such as rising interest rates and escalating monthly vehicle payment costs.

This move comes when the electric vehicle industry faces a slowdown in sales and tempered enthusiasm among consumers.

It prompted companies like General Motors and Ford Motor to reconsider their EV investment timelines.

Rivian's strategy to navigate these conditions includes reducing operating costs and enhancing the design of its R1T pickup and R1S SUV for more cost-effective manufacturing.

Rivian reported a significant per-vehicle loss in the fourth quarter, although it reduced the gross loss per vehicle sold compared to the previous year.

The company remains focused on reaching a gross profit by the end of the year.

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However, Rivian plans significant production line overhauls at its Illinois factory, which means partial shutdowns this year.

Rivian also manufactures an electric delivery truck for Amazon.com and is preparing to launch a more affordable vehicle lineup called R2.

The company also plans to introduce a new SUV, the Gravity, and a more budget-friendly model by the end of 2026.

These developments occur amid a broader industry trend of EV sales growth slowing and consumers expressing concerns over charging infrastructure and vehicle prices.

Rivian's recent decision to lower the starting prices of its vehicles by $3,100 hints at the company's effort to stimulate demand in a gradually saturating market.

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