Rivian, the EV startup, is taking drastic measures to boost its profitability. The company is implementing a second round of layoffs this year, which, although it only accounts for a small percentage of the workforce, underscores the severity of the situation.
In February, Rivian announced that 10% of its salaried staff would be let go following the release of its fourth-quarter and full-year 2024 earnings. Now, the company plans to reduce employment by a further 1% by the end of the year in an effort to increase profitability.
The company said, “We continue to work to right-size the business and ensure alignment to our priorities.”
During a recent media call, RJ Scaringe, Rivian’s CEO, shared his perspective on the layoffs. He stated that the decision was made to “maximize the impact we can have as a company.” Scaringe also acknowledged that Rivian is “not immune to existing economic and geopolitical uncertainties.”
Moreover, the EV startup exceeded expectations by delivering 13,588 vehicles in the first quarter. However, the company has stopped production at its Normal, Illinois facility for renovations, which is anticipated to “meaningfully reduce” material prices by year’s end.
According to Scaringe, a “whole host of changes” will result in a “dramatic cost reduction” for the R1S and R1T.
It is essential to note that in the fourth quarter, Rivian reported a loss of $43,372 per vehicle produced, an increase from $30,500 in the third quarter but a significant decrease from the $124,000 loss per vehicle in the fourth quarter of 2022. This is a noticeable trend of reduced losses per vehicle compared to the staggering $139,277 per vehicle in the third quarter of 2022.
Despite these losses, the EV maker has implemented upgrades at its plant and anticipates achieving a modest gross profit in the fourth quarter of 2024.
Nevertheless, Rivian has announced further job cuts following Tesla’s recent decision to reduce its global workforce by more than 10%.
