Rivian CEO tells workers the corporate is finishing up a ‘main’ cost-cutting effort | Engadget

Electric automobile maker Rivian is planning a “major” cost-cutting drive and will probably be “as thoughtful as possible as we consider any reductions,” CEO RJ Scaringe wrote in a memo to staff. Scaringe despatched the word in response to stories that Rivian is planning as much as 700 or so layoffs, primarily amongst non-engineering groups.

“This is not how we intended for you to hear about this,” he wrote. “We had hoped these very sensitive and complex conversations would have stayed within Rivian until we could address them more comprehensively.” Scaringe will share extra info throughout an all-hands assembly scheduled for this Friday.

Rivian is pausing sure non-manufacturing hires, Scaringe wrote, whereas the corporate is “adopting major cost down efforts” to cut back its outlay on supplies and working bills. “We will all the time be centered on development, nonetheless, Rivian isn’t proof against the present financial circumstances and we want to ensure we will develop sustainably,” Scaringe instructed staff within the memo, which was first reported by Bloomberg. He added that the corporate is “financially nicely positioned and our outlook stays robust”

Scaringe added that Rivian will prioritize some applications and halt some others because it restructures sure features of the enterprise. Earlier this yr, Rivian mentioned it will concentrate on just a few areas in the interim. For one factor, the corporate is concentrated on rising manufacturing of its R1T, R1S and electrical supply van, as TechCrunch notes. Other priorities embody constructing out EV charging and repair infrastructure, rushing up improvement of the next-generation R2 platform and discovering extra efficiencies for prices and working bills.

The firm has almost doubled its headcount over the past yr to greater than 14,000 staff, however it has been beset by issues, equivalent to the provision chain disaster and the state of the economic system. It has additionally delayed deliveries of the R1S SUV a number of instances.

While Rivian expects to finally construct round 600,000 automobiles a yr between its present manufacturing facility in Normal, Illinois and a plant that is anticipated to open in Georgia in 2024, the corporate forecasts that it’s going to construct 25,000 EVs this yr. As of earlier this month, Rivian had a backlog of 71,000 EV orders. It additionally has a contract to construct 100,000 supply automobiles for Amazon by the tip of the last decade. Right now, although, the corporate seemingly is not capable of sustain with demand.

A Rivian spokesperson shared the complete memo with Engadget:

Hi Team,

I’d like to handle the information stories which might be circulating about restructuring at Rivian. The stories speculate broadly on many intricate inner discussions about our enterprise so I wished to supply extra readability.

As mentioned in latest all fingers conferences, we’ve been working to focus our enterprise to be able to keep forward of the altering financial panorama. We are financially nicely positioned and our outlook stays robust, however to totally understand our targets it’s important that our technique helps our sustainable development as we ramp in direction of profitability. Earlier this yr, we outlined our core strategic priorities for the following 18 months:

1) Ramping and enhancing R1 and EDV

2) Accelerating R2 improvement

3) Continuing to ramp our go-to-market capabilities, together with our charging and repair infrastructure

4) Optimizing prices and working bills throughout the enterprise

As a end result, we’ve carried out adjustments throughout Rivian, together with prioritizing sure applications (and stopping some), halting sure non-manufacturing hiring and adopting main value down efforts to cut back materials spend and working bills. We additionally started the method of aligning the group as a complete to make sure we’re as centered, nimble and environment friendly as attainable to realize our priorities and targets.

The hardest a part of this course of has been working by way of our group to evaluate the scale and construction of our groups and the way nicely this aligns with our strategic plan. Our group is the core of Rivian and we’re working to be as considerate as attainable as we take into account any reductions. We will all the time be centered on development, nonetheless, Rivian isn’t proof against the present financial circumstances and we want to ensure we will develop sustainably. Every resolution about our group is being assessed by way of the lens of our strategic priorities, not as a mechanism to easily scale back prices. Our group will proceed to develop in assist of our manufacturing ramp and product roadmap.

This isn’t how we meant so that you can hear about this. We had hoped these very delicate and sophisticated conversations would have stayed inside Rivian till we may deal with them extra comprehensively. However, as a result of info is popping out unofficially, I wished to personally deal with it. I’ll be sharing extra this Friday at our scheduled All-Hands assembly.

Thank you everybody.

RJ