Electric car maker Rivian is laying off six percent of its 14,000 employees to cut costs in response to inflationary pressures and a volatile economy.
The step is part of a cost reduction attempt to guarantee its manufacturing activities can continue to develop without having to have to obtained funding.
CEO RJ Scaringe affirmed that the layoffs will not affect the company’s manufacturing activities in Normal, Illinois, where Rivian has its sole factory.
He said: “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.”
Rivian notified staff of the impending layoffs through email and a companywide meeting earlier this month.
The decision to save money at even well-funded firms, such as Rivian, which went public in November and raised $12 billion, indicates the rising burden on new electric-vehicle companies with limited revenue in a competitive market.
Faraday Future said this week that it was delaying the start of production of its FF 91 electric SUV and that it required $325 million to sustain its operations through the end of the year.
The electric vehicle startup is still struggling to get its assembly plant up and running at its maximum capacity of 150,000 units per year.
In March, the business cut its output target in half, to 25,000 units, citing a parts shortage.
Rivian recently delivered the first of its battery-powered delivery vans to Amazon.
The firm has a deal with Amazon to provide 100,000 vehicles by 2030.
Mr. Scaringe also stated that the automaker was focusing on growing production of the $67,500 R1T pickup truck and $72,500 R1S sport-utility vehicle, as well as the Amazon van.
The firm also intends to establish a second $5 billion factory in Georgia to make the R2, a lower-cost car.
In his email, Scaringe stated that he planned to hasten the development and launch of the R2.
Source: The Wall Street Journal