Rivian decimates staff to put a brake on spending

With only enough cash on hand to keep the lights on until 2025, loss-making automaker may soon be next casualty of the EV revolution

Amid continuing losses, Rivian is laying off 10 percent of its salaried employees and a limited number of hourly folks in an attempt to reduce its expenses. 

CEO RJ Scaringe shared news of the layoffs during a conference call with financial analysts yesterday as he delivered the automaker's figures for the fourth quarter of 2023 and the full year. Scaringe said the cuts were part of Rivian's "ongoing focus on driving cost efficiencies." 

"Our team is laser-focused on the factors within our control that will drive Rivian's long-term value," Scaringe said on the call. "These include driving cost-efficiency, optimizing our production and deliveries… and maintaining a strong balance sheet."

We're told that Rivian, which makes all-electric trucks and SUVs, has approximately 16,700 employees, meaning around 1,700 could lose their jobs. 

This isn't the first time Rivian has dumped workers - this is actually the third round of layoffs we're aware of since mid-2022, when the electric automaker trimmed six percent of its workforce. Half a year later, in February 2023, Rivian laid off another six percent. 

All three layoff rounds have been justified as cost-savings measures.

Third round's a charm?

By some metrics, Rivian had a solid year. Its revenue more than doubled, vehicle production and delivery numbers exceeded expectations, and operating expenses actually managed to decrease in the past 12 months. Unfortunately, increased sales and prior rounds of trimming haven't been enough to actually make Rivian turn a profit, as the manufacturer's costs still far outweighed the $4.4 billion in sales it recorded last year. 

When accounting for all its expenses, Rivian still lost $5.4 billion in 2023 [PDF] - less than it lost in 2022, but still nowhere near turning a profit. To make matters worse, Rivian forecast it'll make the same number of vehicles in 2024 as it made in 2023 - not exactly an indicator of expected growth. 

"Our business is facing a challenging macroeconomic environment — including historically high interest rates and geopolitical uncertainty — and we need to make purposeful changes now to ensure our promising future," Scaringe said in an email to employees today shared with The Register. "We've recently implemented several organizational and leadership changes, but we need to do more." 

Rivian has had a rough go of things since starting life in 2009. The Californian biz faced repeated delays in getting a vehicle to customers, leading to the first deliveries only taking place in late 2021. Nearly every vehicle Rivian produced was recalled in late 2022; a joint project with Mercedes-Benz fell apart; a partnership with Amazon fizzled; and then the manufacturer went and bricked infotainment systems in its vehicles by sending a faulty update last year. 

Three years of selling cars behind it, and Rivian has just been one big loss-making operation. Shrinking losses, maybe, but this is still a company burning through more than a billion dollars a quarter.

During Rivian's Q3 2022 earnings call in November of that year, the biz said it had enough cash on hand for three more years of business. Fast forward to today, and that can has yet to be kicked any further.

"We remain confident that our cash, cash equivalents and short-term investments can fund our operations through 2025," Rivian CFO Claire McDonough said during yesterday's earnings call. That's the same end-of-life date given in late 2022, for those counting. Rivian didn't answer our questions about the business's future. 

Needless to say, if Rivian can't bring some cash in soon our next story about it may be to report an early failure of the latest EV wave, and to see what happens to a fleet of electric cars with no manufacturer to support them. ®

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