According to a report by The Wall Street Journal, Rivian, a manufacturer of electric pickup trucks, is laying off 6% of its 14,000-person workforce to increase production without collecting additional funds.
The business also had to cut its production forecast for 2022 in half to 25,000 vehicles despite having a backlog of 71,000 pre-orders for its electric pickup and SUV, the R1T.
However, Chief Executive RJ Scaringe stated in the email announcing the layoffs that the manufacturing activities in Normal, Illinois, where Rivian operates its factory, would not be affected by the layoffs.
CHICAGO, IL - JULY 21: A fleet of Rivian Electric Delivery Vehicles (EDV) are seen connected to electric chargers during a launch event between Amazon and Rivian at an Amazon facility on July 21, 2022 in Chicago, Illinois. This unveiling is major milestone towards Amazon's goal of having 100,000 Rivian EDVs on the road by 2030, and Amazon has made a Climate Pledge commitment to reach net-zero carbon by 2040 and has also pledged to guarantee 50% of all shipments reach net zero carbon by 2030.
Why Rivian Is Cutting Down Its Workforce
Scaringe wrote in the email that the company had been affected due to inflation "reaching record highs", increasing interest rates and commodity prices over the last six months.
In an email and at a corporate meeting earlier this month, Rivian notified staff members of the impending layoffs.
The decision to conserve capital at well-funded businesses like Rivian, which went public in November and earned $12 billion, underlines the growing pressure on startup electric car companies with low revenue in a market that is getting more and more competitive according to WSJ.
Rivian is touted as one of the best-funded EV firms in the industry after raising $12 billion with the aid of investors like Ford and Amazon.
However, the business is in a precarious position as it works to increase output to a point where it will eventually generate income after constructing its Illinois factory.
Read also: Rivian Plans Substantial Layoffs of Non-Manufacturing Employees As it Ramps Up Production for Amazon
Rivian's Planned Second Factory
The company also intends to establish a second $5 billion factory for the R2, a more cost-effective electric vehicle, in Georgia and to speed up that model's development.
Rivian is still having trouble getting its assembly plant to run at its maximum 150,000-per-year capacity. Due to a part scarcity, the company cut its March production forecast in half to 25,000.
Additionally, Rivian gave Amazon.com Inc. the first of its battery-powered delivery vehicles, and the company will deliver 100,000 vans to Amazon under a deal by 2030.
Faraday Future, another EV startup with production issues, has once again put off the introduction of its first EV, the FF91. The business stated that to fund operations until the end of the year, it must raise an additional $325 million in cash.
Related Article: Rivian Deliveries in Canada Delayed Again Due to Lack of Service Infrastructure and Supply Chain Issues
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Written by Joaquin Victor Tacla
