Rivian will hold a general staff meeting on Friday amid concerns over electric vehicle startup plans to lay off hundreds of employees.
On Monday, Bloomberg reported that the company with a factory in Illinois and plans to build a second factory in Georgia was planning a workforce reduction of around 5%, with a particular focus on non-manufacturing jobs. The company employs nearly 14,000 people.
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In a memo sent to employees Monday evening and reviewed by FOX Business, CEO RJ Scaringe said the company was “financially well-positioned” and its outlook “remains strong.” However, he noted that Rivian is “not immune to the current economic circumstances” and must take steps to ensure its sustainable growth.
“As a result, we have implemented changes at Rivian, including prioritizing certain programs (and discontinuing some), halting certain non-manufacturing hires, and embracing significant cost-cutting efforts to reduce material expenses and operating expenses,” he explained. “We have also begun the process of aligning the organization as a whole to ensure that we are as focused, agile and efficient as possible in achieving our priorities and goals.”
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Although the memo didn’t go into detail, Scaringe stressed that Rivian would be as “thoughtful as possible.” in examining possible staff reductions.
“Every decision about our team is evaluated in light of our strategic priorities, not as a mechanism to simply cut costs,” he added. “Our team will continue to grow to support our production ramp and product roadmap.”
In addition to optimizing costs and operating expenses over the next 18 months, Rivian will focus on “accelerating and improving” its R1 vehicles and electric delivery vans, accelerating the development of its R2 vehicles and expanding its “marketing capabilities”. , including its charging and service infrastructure.
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In the first quarter of 2022, Rivian’s net loss widened to $1.59 billion from $414 million in the same period a year ago. The company reported about $17 billion in total cash and liquidity at the end of March. Rivian, which has struggled to meet production targets, cut its 2022 production forecast earlier this year to a total of 25,000 vehicles.
Last week, the company said it was on track to meet that guidance after producing 4,401 vehicles at its Normal, Ill., manufacturing plant during the second quarter and delivering 4,467 vehicles to the during the same period. The company will release its full second quarter results on August 11.
At press time, Rivian stock had fallen 70% year-to-date.