Rivian is laying off 10% of its salaried workforce in a bid to cut costs in an increasingly tough market for electric vehicles, 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 companywide 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. But Rivian still lost more than $5.4 billion for the year, and announced Wednesday that it only expects to build the same amount — 57,000 — of electric vehicles across all of 2024. Rivian said it plans to shut down its sole factory in Normal, Illinois midyear to upgrade its manufacturing line with an expectation to improve production rates by about 30%.
As a result, Rivian says it expects to lose, on an adjusted basis, around $2.7 billion in 2024, and has decided to “continue its company-wide cost transformation program.” That 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 expenditures to reach $1.75 billion in 2024— an uptick from the $1.03 billion it spent last year that will be driven by additional investment in its next-generation technologies, its future Georgia factory and go-to-market operations.
The company’s production and profit loss guidance combined with the layoffs pushed Rivian shares down more than 15.6% in after-hours trading.
“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 said in an email to the company. “We must strategically prioritize our growth areas of the business, including the launch of Peregrine and R2 as well as investing in our go-to-market capabilities.”
Rivian reported Wednesday fourth-quarter revenue of $1.3 billion, more than double the $663 million it generated in the same period of 2022. On a full-year basis, Rivian reported revenue of $4.4 billion, up from $1.66 billion in 2022. The majority of revenue came from the sale of its EVs. It brought in 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 Q4 2022. On an adjusted basis, it reported a loss of $1.1 billion compared to a $1.5 billion loss in the same year-ago period.
Rivian, which makes an all-electric pickup truck, SUV and a commercial van, has made progress on its loss per vehicle. Although it still has a considerable way to go before it gets close to break even. The company reported it lost $43,372 per unit delivered in the fourth quarter, a more than two-thirds improvement from the $124,162 it lost per unit 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 2022,” Scaringe said on an earnings call Wednesday. “As we start 2024, I want to emphasize our team’s continued sense of urgency and ownership mindset and driving further efficiency throughout the organization.”