Rivian recently announced that it is cutting 10% of its salaried workforce as part of a cost-transformation program in response to the current macroeconomic challenges, including high interest rates and geopolitical uncertainty. This comes at a time when the electric vehicle (EV) industry as a whole is experiencing a slowdown, and Rivian, in particular, is under pressure from industry leader Tesla and struggling to turn a profit on its vehicles.
The EV startup is also facing challenges from Wall Street, with its share price dropping by approximately 14% in after-hours trading following the announcement of the layoffs. In an effort to prioritize growth areas, Rivian’s CEO, R.J. Scaringe, emphasized the importance of launching new products like the Peregrine and R2, and investing in the company’s go-to-market capabilities.
This development is part of a broader trend in the tech industry, with several companies, including Google and Amazon, also enacting layoffs. Rivian aims to produce 57,000 vehicles in 2024, similar to its 2023 output.
One of the key products in Rivian’s pipeline is the R2, an upcoming compact SUV, for which the company has high sales expectations. Additionally, Peregrine is Rivian’s next-generation EV architecture. In the face of these challenges, it remains to be seen how Rivian will navigate the ever-changing landscape of the EV market.