Rivian Automotive announced it is reducing its workforce by 6 percent as part of a restructuring process aimed at better aligning its headcount with business priorities.

Since the EV startup employs about 14,000 people, it means that some 840 of them will be laid off. That said, Rivian noted that employees at its plant in Normal, Illinois will be spared the job cuts. Rivian hires more than 5,000 people at its only manufacturing facility.

"Today we announced the difficult decision to reduce the size of the Rivian team by approximately 6 percent. This decision will help align our workforce to our key business priorities, including ramping up the consumer and commercial vehicle programs, accelerating the development of R2 and other future models, deploying our go-to-market programs and optimizing spend across the business."

Rivian spokesperson Amy Mast

Rivian's future R2 platform mentioned by Mast is for a new generation of EVs that will slot below the R1T and R1S and will be built at a future factory in Atlanta, Georgia.

According to the representative, 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.

Gallery: Rivian Venice Hub

"We're deeply grateful for each departing team member's contribution in helping build Rivian into what it is today. They will always be part of the Rivian story and community."

The announcement comes two weeks after Rivian CEO RJ Scaringe said in a note to employees that they would be briefed shortly on the terms of the company's restructuring, including layoffs. In the note, which was shared with Automotive News, Scaringe said that "Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably."

Rivian has struggled to increase production of its R1T pickup and the newly launched R1S SUV and Amazon Electric Delivery Vehicle due to parts shortages, including chips. Still, production increased in the second quarter to 4,401 vehicles from 2,553 in the previous quarter.

Rivian expects to build about 25,000 vehicles this year (R1T, R1S and Amazon EDV combined), about half the number it could produce if it had enough parts, according to Scaringe.

In its first-quarter earning 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.

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