Electric truck maker Rivian Automotive said it is laying off 6% of its workforce in a bid to conserve cash as it braces for a possible industry-wide price war.
In an email to employees that was seen by CNBC, CEO RJ Scaringe said improving the company’s operating efficiency must be a “core objective.” The company is focusing on ramping up production of its R1 trucks and the EDV delivery vans it builds for Amazon, as well as on development of its upcoming smaller R2 vehicle platform.
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Scaringe said that the cuts would not affect manufacturing jobs at Rivian’s factory in Illinois.
Rivian went public via a successful initial offering in late 2021, raising nearly $12 billion. But the California-based automaker’s shares have lost nearly 90% of their value since, leading the company to rethink its expansion plans as it works toward profitability. Recent price cuts by Tesla and Ford Motor have led to concerns that other automakers may be forced to reduce prices on EVs amid growing competition in the space.
Rivian had about $13.8 billion in cash remaining as of the end of September, after posting losses of $5 billion through the first three quarters of 2022. The company said last month that it fell slightly short of its goal of producing 25,000 vehicles in 2022.
Rivian will report its fourth-quarter and full-year results after the U.S. markets close Feb. 28.
Details of Scaringe’s email were first reported by Reuters. The company has about 14,000 employees.