It's a bad time to be an employee in the tech industry since layoffs don't appear to be stopping any time soon. Following in the footsteps of others, Rivian is also laying off six percent of its staff, and not for the first time.
Among Many Others
The workforce reduction comes as the company has been struggling to meet its targets due to manufacturing and supply chain issues. That, and the competition lowering its prices, namely Tesla and Ford.
The EV automaker's layoffs may affect around 840 employees out of the total 14,000 workers. Although, the layoffs will only be for the company based in Irvine, California. Employees from the plant in Normal, Illinois will not be affected, according to The Verge.
Rivian CEO RJ Scaringe sent a memo to the company's employees, saying that the layoffs are part of the broader cost-cutting efforts that the company is trying to make. This is to assure that the company remains profitable amidst the financial issues.
"In 2022, we took steps to focus our product portfolio and drive a lower cost structure," says the Rivian CEO. He added that improving operating efficiency on their way to profitability is a core objective, which requires them to allot their investments and resources to other matters.
Rivian hasn't been faring well for a while now. The company had also previously laid off six percent of its staff, which is part of the company's attempt to "refocus its business."
Read Also: Ford's Sales for EV Lineup Continues To Increase, 307% for Q2
How It Looks for Rivian
Rivian Automaker is currently selling three models, which are the R1T truck and the R1S SUV, and the EDV, or electric delivery van. Since the company's IPO back in 2021, it has been struggling with manufacturing.
The company has lost almost 90% of its value as well, and it doesn't bode well for them that other EV manufacturers might pull away customers from them, seeing as they are cutting down the costs for their vehicles and others are set to follow.
As for the prices of its vehicles, there are no indications of them lowering the cost. It still sells its vehicles at $67,500 or more. This means that the vehicles won't be eligible for the Inflation Reduction Act's $7,500 tax credit.
The tax credit only applies to sedans that don't go over $55,000, as well as pickup trucks and SUVs that don't go over $80,000. It's especially less likely since Rivian raised the prices of its electric truck and SUV by 20%.
The price increase affected the company negatively, as its stock price plummeted. Rivian CEO RJ Scaringe issued a public apology for the mistake. It might also drive customers away seeing as other EVs from Tesla or Ford are eligible for the tax credit.
The EV manufacturer lost $5 billion from Q1 through Q3 in 2022 and has about $13.8 billion in cash left, according to CNBC. It even fell a little short of production regarding its goal to manufacture 25,000 vehicles in 2022.
