Rivian, the renowned EV manufacturer (RIVN), is implementing further job cuts as part of its strategy to enhance profitability. This marks the second round of layoffs this year, albeit affecting only 1% of the workforce this time.
“This was a challenging decision, yet imperative to bolster our aim of achieving positive gross margins by year-end,” stated Rivian in a recent email (via Automotive News).
The automaker’s objective to refine profitability entails trimming an additional 1% of its workforce, aligning with its ongoing efforts to optimize operations. Following the disclosure of its fourth-quarter and full-year 2024 earnings in February, Rivian had initially announced a reduction of 10% of its salaried employees.
RJ Scaringe, Rivian’s CEO, emphasized the necessity of these actions to maximize the company’s impact amid existing economic and geopolitical uncertainties. Despite challenges, Rivian surpassed expectations by delivering 13,588 vehicles in the first quarter. Concurrently, the company temporarily halted production at its Normal, IL manufacturing plant for essential upgrades earlier this month. These upgrades are projected to substantially curtail material costs by year-end, with a slew of modifications underway to facilitate a noteworthy cost reduction for models like the R1S and R1T.
Although Rivian faced a loss of $43,372 per vehicle in the fourth quarter, a slight increase from Q3, it represents a significant improvement from the over $124,000 loss per vehicle reported in Q4 2022. With the completion of plant enhancements, Rivian anticipates achieving a modest growth profit in the fourth quarter.
The decision for additional job cuts by Rivian follows Tesla’s announcement of reducing its global workforce by more than 10% earlier this week.
Rivian’s stock concluded Wednesday near record lows of approximately $8.74 per share, witnessing a decline of over 58% in 2024 and 93% from its peak of $172 per share shortly after its public listing in November 2021.