A worrying report emerged today about Rivian, which reportedly is planning layoffs in non-manufacturing areas.
According to Bloomberg's unofficial sources, there are hundreds of jobs (or around 5% out of more than 14,000) on the table, but nothing has been decided yet.
The article says that Rivian might announce the plan in the coming weeks. People familiar with the matter pointed out that the issue is areas where the company has grown too quickly.
"The cuts will focus on nonmanufacturing roles, including teams with duplicate functions, said the people, who asked not to be identified discussing private information."
Let's recall that Rivian is ramping-up production of three all-electric vehicles: Rivian R1T pickup, Rivian R1S SUV and Rivian EDV vans for Amazon. The second quarter of this year has closed with 4,401 vehicles produced and 4,467 sold, which indicated noticeable progress compared to Q1 (respectively 2,553 produced and 1,227 delivered).
It's obvious that Rivian is focused on manufacturing and supply chain, so any substantial layoffs at the factory can be ruled out. But other things, who knows? Bloomberg says that Rivian was not immediately available for comment.
The article notes that Rivian has roughly doubled its headcount over the past year, after the IPO. Slower than expected production ramp-up and parts supply constraints potentially require a focus on the foundations and adjusting the expansion plan.
Tesla also recently hinted at job cuts (10% of the salaried workforce) and also not in the manufacturing areas. This is because demand for existing electric vehicles remains high, but production is the main bottleneck. Future projects or auxiliary tasks might be delayed, especially because the production of new things is limited anyway.
With backing from Amazon and Ford, almost $17 billion in cash, and restricted cash as of the end of March, Rivian does not seem endangered, but adjustments might be necessary to limit losses until reaching high volume production.