by SAN FRANCISCO, Feb 1 (Reuters) – Rivian Automotive (RIVN.O) is shedding 6% of its workforce in an effort to cut prices because the EV maker, already grappling with falling money reserves and a weak financial system, braces for an industry-wide price war.
The firm is focusing sources on ramping up automobile manufacturing and reaching profitability, Chief Executive R.J. Scaringe mentioned in an e-mail to staff on Wednesday saying the job cuts. Reuters obtained a duplicate of the e-mail.
Layoffs at Rivian come amid falling EV costs kicked off by cuts made lately by Elon Musk-led Tesla (TSLA.O) and Ford Motor Co (F.N).
The price cuts by Tesla and Ford are anticipated to damage EV upstarts reminiscent of Rivian, Lucid Group (LCID.O) and British startup Arrival , which Monday mentioned it could lay off half its workers.
Despite a blockbuster preliminary public providing in November 2021, Rivian’s shares have fallen practically 90% from their peak that month to Tuesday’s shut. Rivian’s inventory was buying and selling down 4% on Nasdaq on Wednesday, paring some losses after information of the job cuts.
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“We should focus our sources on ramp and our path to profitability,” Scaringe mentioned within the e-mail, through which he apologized to staff for the need of the cuts.
A Rivian spokesman confirmed the e-mail was despatched, however declined additional remark.
‘BLEEDING CASH’
“They’re bleeding money and would love to develop at a a lot sooner charge, however they proceed to battle with their EV manufacturing ramp and have been unable to meaningfully drive down unit prices,” CFRA Research analyst Garrett Nelson mentioned. “We assume that’s what’s behind this determination.”
Rivian is specializing in ramping up manufacturing of its R1 vehicles and EDV supply vans for high shareholder Amazon.com (AMZN.O), and launching its R2 platform, he mentioned. “The adjustments we’re saying at the moment replicate this centered roadmap.”
Irvine, California-based Rivian, which has about 14,000 staff, will let go of about 840 workers in a transfer that won’t have an effect on manufacturing operations at its plant in Normal, Illinois.
Rivian, which has been shedding cash on each automobile it builds, narrowly missed its full-year manufacturing goal of 25,000 automobiles final 12 months because it handled supply-chain disruptions attributable to the COVID-19 pandemic. It had beforehand halved that concentrate on.
To additional preserve its money, Rivian late final 12 months shelved plans to construct supply vans in Europe with Mercedes (MBGn.DE). Rivian had earlier pushed again by a 12 months to 2026 the deliberate launch of a smaller R2 automobile household on the $5 billion plant it’s constructing in Georgia.
Last July, Rivian, which is scheduled to report fourth-quarter outcomes on Feb. 28, laid off workers and suspended some applications as half of a broader restructuring.
The firm has a market valuation of $17.8 billion. Its money and money equivalents stood at $13.27 billion as of Sept. 30, 2022, down from over $18 billion a 12 months earlier.
Reporting by Akash Sriram in Bengaluru and Abhirup Roy in San Francisco
Editing by Ben Klayman and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
