Rivian will lay off six percent of its staff, an internal email sent by CEO R.J. Scaringe revealed today. The move will help the company conserve cash as a price war in the electric vehicle market looms.
The California-based startup employs some 14,000 people, meaning that it will have to cut roughly 840 jobs, as part of this move. The news was announced to the company’s workforce in an email sent today, and picked up by Reuters.
“We must focus our resources on ramp and our path to profitability,” wrote Scaringe in the email, in which he also apologized to his staff for the move. As the move is being made to help increase production, the company’s assembly factory in Normal, Illinois, will not be affected by the layoffs.
Read: Rivian Loses A Number Of High-Ranking Executives
Rivian just missed its revised production target for 2022 of 25,000 vehicles, due largely to supply chain issues. Even so, the company continues to lose money on each new vehicle it builds and, according to analysts, is “bleeding cash” as it works to drive down production costs. As a result, it is likely trying to streamline production of the R1T electric pickup and the delivery van it produces for Amazon.
Making its high production costs even more damaging is a looming price war that may soon impact the electric vehicle market. Tesla recently announced price cuts in the U.S., a move that it could make after spending years improving the efficiency of its production lines, but that smaller startups, such Rivian and Lucid, are not able to do.
The company is being further hampered by the recently reported departures of high-ranking staff. Key executives in parts purchasing, strategy, and engineering all left the company in 2022, all of which is likely making life harder for the startup.