Employees at electric vehicle maker Rivian Automotive were warned of potential payroll cuts in a letter sent Monday by founder and chief executive RJ Scaringe.
The internal memo, which was obtained by Sourcing Journal, aimed to address a Bloomberg report Monday that said Rivian intends to trim as much as 5 percent of its more than 14,000-worker headcount and attempted to offer “more clarity” around the matter.
“As discussed in recent all-hands meetings, we’ve been working to focus our business in order to stay ahead of the changing economic landscape,” Scaringe said in the note to employees. “We are financially well positioned and our outlook remains strong, but to fully realize our objectives it is critical that our strategy supports our sustainable growth as we ramp towards profitability.”
That focus comes down to four main areas, Scaringe went on to say, which include the ramp of the company’s R1 and electric delivery van (EDV) platforms, R2 platform development, charging and service infrastructure and “optimizing costs and operating expenses,” the letter said.
Rivian’s R1 line currently includes a truck and sport utility vehicle for the consumer market. The EDVs are part of its commercial lineup, of which major shareholder Amazon.com Inc. has an order for 100,000 to be used in the e-commerce behemoth’s final mile deliveries. The e-tailer has about an 18 percent stake in Rivian, according to a filing with the Securities & Exchange Commission.
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Bloomberg’s report attributed the possibility of layoffs to departments that had “grown too quickly” on the non-manufacturing side of the business.
Rivian has already frozen hiring of non-manufacturing positions, coupled with what Scaringe called “major cost down efforts.” Scaringe added that the company’s headcount is now being viewed through the lens of the four main priorities outlined earlier this year.
Rivian, which went public in November with one of the largest IPOs in history, scaled quickly, but was hampered by the supply chain issues of the past couple years that were brought on by the pandemic. For automakers, those constraints materialized in the form of chip and other parts shortages that led to product launch delays and inventory shortages.
Rivian’s stock is down about 70 percent from its IPO. The company had a recent market cap of $26.6 billion.
The electric vehicle maker currently has a production target for this year of 25,000 units and last week reiterated that projection.
“Our team is the core of Rivian and we are working to be as thoughtful as possible as we consider any reductions,” Scaringe’s letter said. “We will always be focused on growth, however, Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably.”
The ceo went on to tell employees more information would be provided during a company meeting Friday.
“This is not how we intended for you to hear about this,” Scaringe said. “We had hoped these very sensitive and complex conversations would have stayed within Rivian until we could address them more comprehensively.”
Companies have been implementing hiring freezes and, in some cases layoffs, as uncertainty mounts around a possible recession.
Tesla said in a filing with the California Employment Development Department Tuesday that it plans to lay off 229 employees in San Mateo, Calif., where it has an office that will be permanently shuttered. The layoffs would be effective Aug. 27, according to the filing.
Tesla ceo Elon Musk had already warned of a 10 percent trim to salaried positions last month.
Some tech companies announced hiring freezes in more recent months in response to market conditions, including Uber, Meta and Wayfair.