Rivian is laying off hundreds of workers because its struggle is causing a $19 billion headache for Amazon and Ford

2022 Rivian R1T.Tim Levine / Inside

  • Layoffs at EV startup Rivian began this week.

  • The company is cutting costs amid increased production and concerns about the economy.

  • Former employees are posting on LinkedIn about the cuts, which have affected non-manufacturing roles.

Layoffs at Rivian began in late July as the rollout of electric cars accelerated to cut costs amid a tough economic climate and pressure to ramp up production.

Dozens of workers who said they were now former employees confirmed their departure on LinkedIn with the hashtag #rivianlayoffs about the cuts. Rivian said Wednesday the layoffs will affect about 6% of the company’s 14,000-person workforce.

Bloomberg News initially reported earlier this month that the startup was planning hundreds of cuts. Other reports say this will largely affect the less important departments of manufacturing and production. A Rivian spokesperson confirmed that manufacturing roles are not affected.

The moves come less than a year after Rivian’s groundbreaking IPO, in which the company raised $11.9 billion — the largest initial public offering of 2021. Rivian, a Wall Street darling, was worth $66.5 billion when it went public. The listing followed a series of electric car startups that went public, although most did so through reverse mergers with special purpose acquisitions.

But Rivian’s share price has fallen sharply in recent months amid a broader downturn in financial markets. In the first half of this year, its stock fell 75%, which led to huge losses on paper for its investors.

Amazon posted a $11.5 billion loss in stake between the first and second quarters. During the same period, Ford lost $7.9 billion on its investment in Rivian. Together, the two own approximately 27% of Rivian’s outstanding shares.

Rivian began selling its first vehicle, the R1T pickup truck, last September, beating out old automakers like Ford and General Motors, which later launched their own electric trucks. After months of delays, the startup expects to begin shipping its second consumer model, the R1S SUV, as early as August. It also produces a delivery truck for Amazon.

Rivian has struggled with a slower-than-expected production buildup this year, delivering 1,227 vehicles in the first quarter and reporting 4,467 deliveries in the second quarter. The company is targeting production of 25,000 cars this year, half of its initial production guidance for 2022.

Rivian isn’t the only startup affected by ongoing concerns about the economy, supply chain restrictions, production delays, and more. Insider previously reported layoffs at EV startup Canoo and electric truck maker Xos Trucks.

“This decision will help align our workforce with our key business priorities, including ramping up consumer and commercial vehicle programs, accelerating development of the R2 and other future models, deploying go-to-market programs and optimizing spending across the business,” a Rivian spokesperson told Insider Friday. “We are so grateful for the contribution of every departing team member to help build Rivian what it is today. They will always be a part of Rivian’s story and community.”

Are you a current or former employee of Rivian? Do you have a news tip or opinion you’d like to share? Contact these reporters at [email protected] or [email protected] from a non-functioning device.

Read the original article on Business Insider

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