Rivian looks to be rethinking its growth and size-up strategy. The automaker which has been on a hiring spree and aiming to size up to a giant size is now considering laying off staff. In this video, we will talk about the layoffs and what it means for Rivian’s growth.
Rivian CEO R J Scaringe shared an email with his employees in which he warned the company staff of possible layoffs that may come in the days ahead.
“Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably.”
RJ acknowledged that the company is financially well-positioned right now but it has begun prioritizing certain programs (and) stopping some.
The letter that RJ sent out on Monday added that the automaker will brief employees on Friday on potential layoffs and plans to suspend some programs as part of a broader restructuring.
Electric automaker Rivian is considering laying off around 5 percent of its 14,000 employees, or around 700 people
Rivian will continue to hire in strategically important areas even as it restructures its business.
The email also highlighted a broad outline of the company’s previously shared strategy for the next 18 months “in order to stay ahead of the changing economic landscape.” That strategy is focused on four key areas: ramping production of its R1T and R1S vehicles and electric delivery van (EDV), accelerating the development of its next-gen R2 platform, ramping EV charging and service infrastructure, and “optimizing” costs and operating expenses.
Scaringe said told employees that Rivian is prioritizing and stopping some programs, halting certain non-manufacturing hiring, and “adopting major cost down efforts” to reduce expenses on materials and operations. Some of these have already occurred, notably hiring a new chief
Rivian employs nearly 14,000 people across several locations, including at its Normal, Illinois factory, Irvine, California headquarters as well as facilities in Palo Alto and Carson, California, Plymouth, Michigan, Vancouver, British Columbia, Wittmann, Arizona, and Woking, England.
The automaker has nearly doubled its workforce in the past year as it set out to ramp production and begin deliveries of its R1T truck, R1S SUV, and its electric delivery van, of which Amazon is its first customer. Rivian has said it’s on track to deliver 25,000 vehicles this year. However, it has had its share of struggles with supply chain issues and bottlenecks that have pushed out deliveries for thousands of customers.
Rivian has not issued any layoffs yet. Although it’s clear from the email that Rivian’s management team has been working to assess whether to reduce the workforce. Scaringe said in the email that the company is working to “be as thoughtful as possible as they consider any reductions.” The company will always be focused on growth, but it is not immune to current economic circumstances, adding that these decisions aim to be strategic and long-term, not simply to reduce costs.
This move is only temporary as the vision for Rivian. Rivian’s plans to expand the plant’s capacity from 150,000 to 200,000 vehicles per year are still on howbeit more cautious now.
Furthermore, the automaker plans to break ground on the Georgia plant next summer and begin producing the “next generation” of EVs by 2024. The plant will employ 7,500 workers with an eventual production capacity of 400,000 vehicles per year.
Rivian had $16 billion in cash at the end of the first quarter and has told investors it had enough cash on hand to open its second U.S. plant for $5 billion in 2025.
These layoffs are not unique to Rivian only. Tesla is already letting some employees go and will permanently shut its office in San Mateo, California, and lay off 229 employees.
This office and employees are said to be working on the company’s Autopilot driver-assistant system.
Tesla CEO Elon Musk last month told top managers at Tesla that he had a quote, “super bad feeling” about the economy and that the company needed to cut staff by about 10%.