US EV startup Rivian has announced that it going to make some major cuts to its workforce, claiming inflation and a drive for profitability. Considering the company employs around 14,000 employees, cutting about six per cent of jobs as announced would affect about 840 workers.
Rivian CEO RJ Scaringe broke the news in an email to employees. “Over the last six months, the world has dramatically changed with inflation reaching record highs, interest rates rapidly rising and commodity prices continuing to climb — all of which have contributed to the global capital markets tightening” Scaringe explained. Laid-off employees will receive 14 weeks of pay, health care through the end of the year, their next quarterly equity vesting and job placement assistance as part of Rivian's severance program.
Rivian also recently fired its Head of Production and simultaneously announced intentions to restructure production lines. The company has struggled with ramping up production for some time, and went quite deep into the red in 2021. Just days before the quarterly numbers, Rivian raised prices and then immediately backtracked. At the same time, funding should not really be such a major issue, as billionaire George Soros invested in the company in February. In its first-quarter earnings report, Rivian said it had about $16 billion in cash and enough funds to open its second US plant in Georgia for $5 billion in 2025.