Electric truck maker Rivian plans to slash its salaried workforce by 10% in a bid to cut costs as demand for electric vehicles slows, the company announced Wednesday. The news marks Rivian’s third round of layoffs since July 2022.
Rivian produced 57,232 vehicles and delivered more than 50,100, exceeding its most recent full-year 2023 production guidance of 54,000 vehicles — and doubling its 2022 numbers. But its fourth-quarter production fell below analysts’s expectations, adding to a rough start for 2024. Rivian also said it expects to produce about 57,000 vehicles in 2024, some 9,000 less than Wall Street had expected.
Reductions for Rivian
The Irvine, Calif.-based company said it expects to lose around $2.7 billion this year and continue with its “company-wide cost transformation program” to reduce its costs. Rivian recorded $5.7 billion in losses from operations in 2023, down from operational losses of $6.8 billion in 2022.
Rivian, which aims to achieve a gross profit by the end of 2024, said its gross loss per vehicle sold had fallen by $81,000 in the fourth quarter of 2023, compared to a year prior. However, it still lost $43,373 per vehicle delivered in that quarter, a starker cost than the $30,648-per-unit lost in the previous three-month period.
“We firmly believe in the full electrification of the automotive industry, but recognize in the short-term, the challenging macro-economic conditions,” Rivian founder and CEO RJ Scaringe said in a statement. “We are aggressively focused on driving cost efficiency throughout the business, achieving positive margins and building our go-to-market function to support our long-term growth.”
The automaker joins several other manufacturers — including General Motors and Ford Motor Co. — in slowing down its investment plans for EVs as customer interest wanes and sales slow. Ford, for example, has slashed its planned F-150 Lightning production by roughly half.
Rivian recorded a per-share loss of $1.58, a poorer showing than the per-share loss of $1.35 that analysts had expected for the three-month period ending in December. The company matched Wall Street’s expectations for sales with $1.3 billion in revenue for the last quarter of 2023.
Rivian plans to reveal its new — more affordable — R2 EV on March 7. The new model will be built at the company’s new $5 billion plant in Georgia, which is expected to open in early 2024.
Investors, plagued by already-low expectations for the electric truck maker, had already sent Rivian’s stock down by more than 3% before the market closed on Wednesday. The stock plunged another 16% in aftermarket trading after Rivian posted its earnings.