Rivian is cutting off 10% of its paid workers to save expenses in a challenging electric car market, placing even more pressure on its future, cheaper R2 EV. In a companywide email, founder and CEO RJ Scaringe announced the layoff of a few non-manufacturing hourly workers.
Since July 2022, Rivian has laid off 6% of its personnel three times. The firm shed 6% more positions in February 2023.
The firm developed and exported twice as many EVs in 2023 as in 2022. Rivian nonetheless lost over $5.4 billion for the year and stated Wednesday that it would only manufacture 57,000 electric cars in 2024. Rivian intends to close its only Normal, Illinois, facility midyear to update its manufacturing line and boost output by 30%.
Rivian estimates losing $2.7 billion adjusted in 2024 and will “continue its company-wide cost transformation program.” That includes improving vehicle design and engineering, production efficiency, and staff layoffs. The business forecasts capital expenditures to rise to $1.75 billion in 2024 from $1.03 billion last year due to investment in its next-generation technologies, Georgia facility, and go-to-market activities.
Rivian shares fell by about 15.6% after hours due to production and profit-loss projections and layoffs.
“Our business is facing a challenging macroeconomic environment, including historically high interest rates and geopolitical uncertainty, and we need to make purposeful changes now to ensure our promising future,” Scaringe emailed the company. “We must strategically prioritize our growth areas, including Peregrine, R2, and go-to-market capabilities.”
Rivian announced $1.3 billion in fourth-quarter sales on Wednesday, more than twice its $663 million in 2022. Rivian’s overall sales rose to $4.4 billion from $1.66 billion in 2022. The bulk of income comes from EV sales. Regulatory credit sales brought in $39 million in the fourth quarter and $73 million for the year.
Quarterly net losses improved to $1.5 billion from $1.72 billion in Q4 2022. Adjusted losses were $1.1 billion, compared to $1.5 billion a year earlier.
Rivian, an all-electric pickup truck, SUV, and commercial van maker, has reduced its loss per vehicle. It has a long way to go before breaking even. Quarterly losses improved by more than two-thirds to $43,372 from $124,162 in Q4 2022.
“We took significant steps towards driving greater efficiency in 2023; gross profit per vehicle improved by approximately $81,000 when comparing the fourth quarter of 2023 to the fourth quarter of 2022,” Scaringe said on an earnings call Wednesday. As we begin 2024, I want to stress our team’s continuous urgency and ownership mentality and drive organizational efficiency.”
