Rivian, the electric vehicle (EV) manufacturer, is implementing a workforce reduction of 10% among its salaried employees as part of a cost-cutting measure in response to the challenging EV market landscape. Founder and CEO RJ Scaringe announced in a companywide email that a limited number of non-manufacturing hourly employees will also face job cuts.
This marks the third round of layoffs for Rivian since July 2022, when the company reduced its workforce by 6%. Another 6% of jobs were cut in February 2023.
Despite doubling its production and shipment of EVs in 2023 compared to the previous year, Rivian still incurred a loss exceeding $5.4 billion for the year. The company revealed its projection to manufacture 57,000 electric vehicles throughout 2024. Furthermore, Rivian intends to temporarily close its sole factory in Normal, Illinois, midway through the year to upgrade its manufacturing line, with expectations to enhance production rates by approximately 30%.
Consequently, Rivian anticipates an adjusted loss of around $2.7 billion in 2024 and has outlined plans for a comprehensive cost transformation program. This program encompasses modifications to vehicle design and engineering, enhancing manufacturing efficiency, and further employee layoffs. Additionally, the company forecasts capital expenditures of $1.75 billion in 2024, driven by increased investment in next-generation technologies, the forthcoming Georgia factory, and go-to-market operations.
The announcement regarding production and profit forecasts, coupled with the news of layoffs, triggered a decline of over 15.6% in Rivian’s shares during after-hours trading.
“Our business is confronting a challenging macroeconomic environment, including historically high interest rates and geopolitical uncertainty, necessitating purposeful changes to secure our promising future,” stated Scaringe in the email to Rivian employees. “We must strategically prioritize growth areas of the business, including the launch of Peregrine and R2, as well as investing in our go-to-market capabilities.”
Rivian reported fourth-quarter revenue of $1.3 billion, more than doubling the $663 million generated in the corresponding period of 2022. For the full year, Rivian recorded revenue of $4.4 billion, compared to $1.66 billion in 2022, with the majority of revenue stemming from EV sales. Additionally, the company garnered approximately $39 million in the fourth quarter and $73 million for the full year from the sale of regulatory credits.
In terms of financial performance, Rivian reported a net loss of $1.5 billion in the fourth quarter, a slight improvement from the $1.72 billion loss in Q4 2022. On an adjusted basis, the loss amounted to $1.1 billion, compared to $1.5 billion in the same period the previous year.
While Rivian has made strides in reducing its loss per vehicle, reporting a loss of $43,372 per unit delivered in the fourth quarter, Scaringe emphasized the need for further efficiency improvements. He highlighted the team’s commitment to driving greater efficiency throughout the organization during an earnings call on Wednesday.
