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Rivian Continues Cost-Cutting Efforts Amid Tough Times for Electric Vehicles
In its latest attempt to cut costs and navigate the increasingly challenging electric vehicle (EV) market, Rivian is laying off 10% of its salaried workforce. The move comes on the heels of two previous rounds of layoffs in July 2022 and February 2023. Founder and CEO RJ Scaringe announced the decision in a company-wide email, stating that the company will also be cutting a limited number of non-manufacturing hourly employees.
A Third Round of Layoffs for Rivian
This is the third round of layoffs for Rivian since July 2022, when the company cut 6% of its workforce. The most recent layoff in February 2023 saw another 6% of jobs eliminated. Despite these efforts to reduce costs, Rivian still reported a net loss of $1.5 billion in the fourth quarter of 2023 and an adjusted loss of $1.1 billion.
Challenging Market for Electric Vehicles
The EV market is becoming increasingly challenging for companies like Rivian. Historically high interest rates and geopolitical uncertainty are making it difficult for consumers to purchase new vehicles, including electric ones. As a result, Rivian’s production and profit loss guidance combined with the layoffs pushed the company’s shares down more than 15.6% in after-hours trading.
Rivian’s Financials
In its fourth-quarter earnings report, Rivian reported revenue of $1.3 billion, more than double the $663 million generated in the same period of 2022. However, the majority of this revenue came from the sale of regulatory credits, which totaled about $39 million in the fourth quarter and $73 million for the full year.
Progress on Loss per Vehicle
While Rivian has made progress in reducing its loss per vehicle, it still has a long way to go before breaking even. The company reported that it lost $43,372 per unit delivered in the fourth quarter, a more than two-thirds improvement from the $124,162 it lost per unit in Q4 2022.
Future Plans
Rivian plans to shut down its sole factory in Normal, Illinois midyear to upgrade its manufacturing line. The company expects this move to improve efficiency and reduce costs. Additionally, Rivian is investing heavily in research and development, with a focus on creating more affordable and sustainable electric vehicles.
Key Takeaways
- Rivian lays off 10% of salaried workforce amid challenging EV market
- Company reports net loss of $1.5 billion in fourth quarter
- Adjusted loss of $1.1 billion, down from previous quarters
- Revenue exceeds expectations, driven by regulatory credit sales
- Loss per vehicle improves, but still a significant challenge for the company
