Startup electric truck manufacturer Rivian has laid off 6% of its total workforce, or about 840 nonmanufacturing employees, including about 50 at its downstate Normal assembly plant.
California-based Rivian had about 6,000 employees at its sole assembly plant in Normal and about 14,000 across the company, before implementing the restructuring plan Wednesday. The layoffs did not affect manufacturing operations, the company said.
Citing challenges in obtaining additional financing in the current economic environment, Rivian CEO and founder R.J. Scaringe notified employees of the staffing cuts in a companywide letter Wednesday.
“Over the last six months, the world has dramatically changed with inflation reaching record highs, interest rates rapidly rising and commodity prices continuing to climb — all of which have contributed to the global capital markets tightening,” Scaringe said. “We need to be able to continue to grow and scale without additional financing in this macro environment.”
The company was sitting on $17 billion in cash at the end of the first quarter and remains “financially well positioned,” but needs to restructure to support “sustainable growth,” Scaringe said.
The employees who were laid off were notified Wednesday, and will receive a severance package that includes 14 weeks of regular pay and health coverage, Rivian-paid COBRA benefits and job-placement assistance, Scaringe said in his letter, which was obtained by the Tribune.
Rivian launched production in September at a converted Mitsubishi factory, and has struggled with a slower than expected ramp-up, due in part to the global semiconductor shortage. The company has more than 90,000 consumer orders for its R1T pickup and R1S SUV. Amazon, an early investor in Rivian, has ordered 100,000 commercial electric delivery vans.
Last week, the first of the Amazon EDVs hit the road in Chicago and a dozen other cities, but Rivian is behind schedule on delivery.
The company has built about 8,000 EVs, or electric vehicles, through the second quarter, with a scaled-back target of 25,000 vehicles this year. The Normal plant has an annual capacity of 150,000 vehicles and ramping up production remains Rivian’s priority over the next 18 months, Scaringe said in the letter.
While Rivian is downsizing its nonmanufacturing workforce, it is still planning to hire an additional 1,500 workers and add a second shift at the Normal plant this year, a company spokesperson said Friday.
The company is also building a second $5 billion assembly plant in Georgia, which is slated to produce Rivian’s next-generation EV platform.
When Rivian went public in November, investors were betting the EV startup would become the Tesla of trucks, pushing its valuation north of $100 billion. But the stock, which hit a high of $179.47 in mid-November, has fallen sharply this year amid the slow ramp-up, closing at $34.30 per share Friday and cutting Rivian’s market cap to about $30 billion.
Rivian is planning to report its second quarter earnings on Aug. 11.