Rivian is laying off 10% of its salaried workforce in an effort to cut costs in an increasingly difficult electric vehicle market, putting even more pressure on its future, more affordable EV called the R2. A limited number of non-manufacturing hourly employees will also be cut, founder and CEO RJ Scaringe said in a company-wide email.
This is the third round of layoffs for the EV company since July 2022, when Rivian cut 6% of its workforce. The company cut another 6% of jobs in February 2023.
The company more than doubled the number of EVs it built and shipped in 2023 compared to 2022. However, Rivian lost more than $5.4 billion for the year and announced on Wednesday that it expects to build just the same amount — 57,000 — of electric vehicles in all of 2024. Rivian said it plans to close its sole factory in Normal, Illinois, in the middle of the year to upgrade its production line in hopes of improving rates production by about 30 %.
As a result, Rivian says it expects to lose, on an adjusted basis, about $2.7 billion in 2024 and has decided to “continue our company-wide cost transformation program.” This includes changes to the design and engineering of its vehicles, making manufacturing more efficient and laying off more employees. The company said it expects capital spending to reach $1.75 billion in 2024 — up from the $1.03 billion it spent last year, driven by additional investments in next-generation technologies, its future Georgia plant and its activities in the market.
The company’s guidance for production and profit loss combined with layoffs sent Rivian shares down more than 15.6% in after-hours trading.
“Our business faces a challenging macroeconomic environment – including historically high interest rates and geopolitical uncertainty – and we must make deliberate changes now to ensure our promising future,” Scaringe said in an email to the company. “We must strategically prioritize the growth areas of our business, including the launch of Peregrine and R2, as well as investing in our go-to-market capabilities.”
Rivian reported on Wednesday fourth-quarter revenue of $1.3 billion, more than double the $663 million it generated in the same period in 2022. On a year-over-year basis, Rivian reported revenue of $4.4 billion, up from $1.66 billion in 2022. The majority of of revenue came from the sale of its electrical. It generated about $39 million in the fourth quarter and $73 million for the full year from the sale of regulatory credits.
The company reported a net loss of $1.5 billion in the fourth quarter, a slight improvement over the $1.72 billion loss it reported in the fourth quarter of 2022. On an adjusted basis, it reported a loss of $1.1 billion compared to a loss of 1, $5 billion in the same year-ago period.
Rivian, which makes an all-electric pickup truck, SUV and a commercial truck, has made progress in terms of losses per vehicle. Although it still has a long way to go before it reaches its end. The company reported that it lost $43,372 per unit delivered in the fourth quarter, an improvement of more than two-thirds from the $124,162 it lost per unit in the fourth quarter of 2022.
“We took significant steps to driving bigger efficiency in 2023 gross profit per vehicle improved with approximately $81,000 when we compare the fourth quarter of 2023 to the fourth quarter of 2022,” Scaringe said on an earnings call Wednesday. “As we principle 2024, I I want to tone us team’s goes on sense of urgent and Theworship mentality and driving further efficiency throughout The organization.”
