Electric truck maker Rivian is planning to lay off over 600 people amid growing market challenges, The Wall Street Journal reported. As part of the latest round of layoffs, nearly 4 per cent of the company’s total workforce will be affected. At the end of 2024, the company had little under 15,000 employees.
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Rivian to lay off 400 people
An insider aware of the matter informed CNBC that major details regarding the layoffs will be shared with the employees of the company on Thursday, October 23. As of now, the company has not shared the news publicly.
According to The Wall Street Journal, Rivian removed almost 1.5 per cent of its total workforce nearly a month ago. The idea behind that was to reduce costs as the electric truck maker was gearing up to launch its affordable sport-utility vehicle in 2026.
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Rivan layoffs: Why does it matter?
Several EV manufacturers, including Rivian, have been dealing in a challenging market in recent times, especially after the key changes in regulations under the Donald Trump administration in the US. The sales are expected to be hit by the elimination of the crucial $7,500 federal tax credit for people purchasing an EV.
The major changes in policy have severely affected the sales of compliance credits, which have remained a major source of profitability for Rivian and other EV carmakers. These changes might see an estimated $100 million in revenue getting held up, the company earlier said, as per the Wall Street Journal.
The latest round of layoffs came after vehicle sales for Rivian jumped by a huge margin of 32 per cent to 13,201 units year-over-year in the third quarter. This happened as customers decided to buy an EV before the expiry of federal incentives at the end of September, CNBC reported.
However, the company has narrowed its delivery forecast to between 41,500 and 43,500 vehicles from 46,000 units earlier. It will announce its full quarterly earnings on November 4.
Rivian went public in 2021. For now, the company is planning the launch of its highly anticipated model, the R2 SUV. It is said to be under pressure to bring down costs.
The R2 SUV is expected to come out with a starting price of nearly $45,000. The company lost a whopping $1.1 billion in the second quarter, but has stated that it holds enough money to introduce R2.
The current R1T pickup and R1S SUV start at $70,990 and $76,900, respectively.
FAQs:
Is Rivian carrying out another round of layoffs?
Yes, more than 600 employees of the company are expected to lose their jobs.
Why is Rivian laying off 600 people?
EV makers have been dealing in a challenging market amid changing regulations under the Donald Trump-led administration in the US.
How many employees does Rivian have?
It had under 15,000 employees at the end of last year.
