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July 27, 2022 5:09 PM, EDT

Rivian to Cut 6% of Its Workforce

Rivian pickupA Rivian R1T electric pickup truck. (Sebastian Hidalgo/Bloomberg News)

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Rivian Automotive Inc. is cutting about 6% of its workforce and simplifying product plans, saying the economy has made it harder for the electric vehicle maker to raise money to build up production.

The Irvine, Calif.-based company confirmed the cuts July 27 in an internal memo from CEO RJ Scaringe. Surging inflation, higher interest rates and higher commodity prices have hurt the company’s ability to raise funds, he wrote.

“We need to be able to continue to grow and scale without additional financing in this macro environment,” Scaringe said in the memo. “To achieve this, we have simplified our product road map and focused on where it is most impactful to deploy capital.”

 

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The decision, which comes about two weeks after Bloomberg reported Rivian would cut head count, marks a pullback after the EV maker expanded over the past year to support a production ramp-up. Rivian, which makes electric pickups and SUVs in addition to delivery vans, notched one of the biggest-ever U.S. initial public offerings in November as it emerged as a leading challenger to market leader Tesla Inc.

The once high-flying shares have lost 69% of their value this year as Rivian grappled with global supply chain breakdowns and parts shortages. The stock rose 1% at the close July 27 in New York and slipped less than 1% in late trading.

The reduction will eliminate hundreds of jobs, given Rivian’s workforce of about 14,000 split across the factory in Normal, Ill., and its headquarters in California, as well as sites in Michigan, the U.K. and Canada. The cutbacks won’t include manufacturing operations workers in Normal, according to the memo.

“To those leaving Rivian, I am genuinely sorry,” Scaringe wrote.

— With assistance from John J. Edwards III.

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