Rivian reduces workforce by 1% in second round of layoffs for the year

Electric vehicle maker Rivian announced on Wednesday that it has cut approximately 1% of its workforce, marking the second round of job cuts this year. The decision comes as the company aims to reduce costs in response to a slowdown in electric vehicle (EV) demand. The news of the layoffs caused Rivian’s shares to initially increase by 3.4%, but they later dropped.

Rivian stated that the job cuts were a necessary step to achieve a positive gross margin by the end of the year. The reductions primarily targeted staff supporting the business. This move follows a previous 10% layoff in February after Rivian fell short of investors’ expectations for its 2024 production forecast.

The company is focusing on cost reduction efforts amidst high-interest rates affecting consumer demand for EVs. Rivian is making internal production changes, renegotiating supply contracts, and temporarily closing its production line for efficiency upgrades to lower costs.

In an effort to boost sales and save costs, Rivian recently introduced a more affordable SUV model, the R2, and decided to produce it at its existing U.S. facility instead of building a new plant. However, concerns over consumer sentiment towards EVs have caused Rivian’s stock to hit a record low, reflecting wider challenges in the industry. Other major players like Tesla and Ford are also taking measures to adjust to the changing market dynamics. Rivian is expected to report its first-quarter results on May 7.