Rivian Automotive Inc. (NASDAQ: RIVN) has written to state officials in California letting them know that it is going to let go more employees in the state. This revelation was contained in a letter set on April 24, 2024, to the state’s department of employment development.
Scott Griffin, Rivian’s VP of people, indicated that the company is slated to layoff in excess of 120 employees, with 89 affected individuals from its Irvine operations while 28 job losses will occur at its Palo Alto operations. The letter states that the job cuts will happen starting in June, and they will be permanent job losses.
In February, Rivian Auto said it would reduce its workforce by 10%. This caused the company’s share price to nosedive from the sky-high levels reached after the company’s IPO in 2021. At the time, Rivian had an $88-billion market valuation, but this has since reduced to approximately $11 billion at the start of this week.
Reports indicate that by December 31 last year, the company had 16,790 workers in total spread across Europe and North America.
A company spokesman stated in a press release that the company continues to undertake measures to ensure that it is correctly sized so that the headcount aligns with the company’s priorities. He added that following the staffing adjustments made in February, the company made additional changes in April, and 1% of the company staff was impacted by that round of changes. The spokesman then said that while that change was difficult to make, it was necessitated by the need to bring the company to profitability by 2024’s end.
The ongoing job cuts at Rivian are only a fraction of the challenges that the broader electric-vehicle industry is facing. Demand for EVs has been falling, especially after the early adapter buyers who could afford these pricy vehicles got saturated. The high interest rates imposed to curb inflation have made the cost of financing EV purchases even higher, which has caused buyers to be wary.
EV makers in the west also face major competition from Chinese EV makers, which are flooding the market with cheaper electric vehicles that are comparable to or even superior in quality to versions from European and American manufacturers. Price wars to compete with Chinese companies have further dampened the prospects of many manufacturers as they are seeing their profits dwindle or losses increase, as is the case with Ford Motor, which is losing $100,000 for every EV it sells.
Things are likely to get worse before they get better for many entities in the electric-vehicle space.
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