‘Bleeding cash’: Rivian to cut 6% of jobs amid price war, internal memo says

SAN FRANCISCO — Rivian Automotive is laying off 6% of its workforce in an energy to minimize charges as the EV maker, already grappling with slipping cash reserves, braces for an industry-wide price tag war.

The organization is focusing assets on ramping up automobile manufacturing and reaching profitability, Chief Govt R.J. Scaringe stated in an e mail to staff on Wednesday saying the occupation cuts. Reuters attained a copy of the email.

Layoffs at Rivian arrive amid falling EV prices kicked off by cuts made not too long ago by Elon Musk-led Tesla and Ford Motor Co.

The selling price cuts by Tesla and Ford are envisioned to hurt EV upstarts this kind of as Rivian, Lucid Team and British startup Arrival, which Monday stated it would lay off half its personnel.

Even with a blockbuster preliminary community supplying in November 2021, Rivian’s shares have fallen approximately 90% from their peak that thirty day period to Tuesday’s close. Rivian’s stock was trading down 4% on Nasdaq on Wednesday, paring some losses right after news of the position cuts.

“We have to concentrate our resources on ramp and our path to profitability,” Scaringe said in the e-mail, in which he apologized to personnel for the necessity of the cuts.

A Rivian spokesman confirmed the e-mail was sent, but declined more comment.

‘Bleeding cash’

“They are bleeding funds and would like to expand at a significantly faster level, but they keep on to battle with their EV creation ramp and have been unable to meaningfully generate down device charges,” CFRA Research analyst Garrett Nelson reported. “We think that is what’s driving this selection.”

Rivian is concentrating on ramping up production of its R1 trucks and EDV delivery vans for top rated shareholder Amazon.com, and launching its R2 platform, he claimed. “The modifications we are saying nowadays replicate this centered roadmap.”

Irvine, California-based mostly Rivian, which has about 14,000 staff, will allow go of about 840 team in a transfer that will not impact production functions at its plant in Regular, Illinois.

Rivian, which has been dropping income on each auto it builds, narrowly skipped its comprehensive-12 months creation concentrate on of 25,000 cars previous 12 months as it dealt with provide-chain disruptions brought on by the COVID-19 pandemic. It had formerly halved that focus on.

To more preserve its dollars, Rivian late final year shelved options to construct supply vans in Europe with Mercedes. Rivian experienced previously pushed back by a year to 2026 the planned launch of a more compact R2 car or truck relatives at the $5 billion plant it is constructing in Georgia.

Final July, Rivian, which is scheduled to report fourth-quarter effects on Feb. 28, laid off staff and suspended some programs as element of a broader restructuring.

The corporation has a sector valuation of $17.8 billion. Its cash and dollars equivalents stood at $13.27 billion as of Sept. 30, 2022, down from around $18 billion a year previously.