US electric vehicle manufacturer Rivian is seeking to increase profit margins and the company announced that it will lay off employees again. This is the second round of layoffs Rivian has made this year, but this time the cuts are smaller, accounting for just 1% of its workforce.
“This was a difficult decision, but one that is necessary in order to achieve our goal of turning gross profit positive by the end of the year,” Rivian said in an emailed statement. The electric vehicle startup is working to “right-size the company and ensure The business is aligned with our priorities.” Rivian announced the layoff of 10% of its salaried employees in February after releasing its fourth-quarter and full-year 2024 earnings reports.
Rivian CEO RJ Scaringe said on a company’s media call that the move was about “maximizing the impact we can have as a company.” Scaringe explained that Rivian “is not immune to the current economic and geopolitical uncertainties.”
It is noted that although Rivian exceeded expectations by delivering 13,588 vehicles in the first quarter, the company’s factory in Normal, Illinois, halted production earlier this month for upgrades. The upgrade is expected to “significantly reduce” material costs by the end of the year. Scaringe says they will be introducing a series of “significant changes” that will result in a “significant cost reduction” for the R1S and R1T.
Rivian’s loss per vehicle in the fourth quarter was $43,372, which was slightly higher than the $30,500 loss in the third quarter but still well below the more than $124,000 per vehicle loss in the fourth quarter of 2022. Rivian believes it can achieve a modest profit increase in the fourth quarter after upgrading its factory.
Rivian’s layoffs come as Tesla announced this week that it would cut 10% of its global workforce. Rivian’s shares closed Wednesday near an all-time low of around $8.74, which is down more than 58% from 2024 and down 93% from its all-time high of $172 shortly after going public in November 2021.
