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Rivian is laying off 10% of its salaried workers amid challenges

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Posted at 4:15 PM, Feb 22, 2024

(CNN) — Rivian announced Wednesday that it will lay off 10% of its salaried workers beginning Thursday morning, amid a quarterly loss and an increasingly competitive EV market.

“Our business is facing a challenging macroeconomic environment — including historically high interest rates and geopolitical uncertainty — and we need to make purposeful changes now to ensure our promising future,” founder and chief executive RJ Scaringe wrote in an email sent to employees Thursday and shared by the company with CNN.

Rivian has a total of 16,700 employees but would not disclose how many of those are considered salaried employees. Rivian has previously, on two different occasions, laid off 6% of its workforce, as the company has looked to reduce its losses.

Sales of electric vehicles has not expanded as rapidly in the past year as it had before, and automakers have blamed high interest rates for some of that slow-down. At the same time, Tesla has aggressively cut prices of its vehicles, putting pressure on other automakers. Ford, for instance, recently announced it was deeply cutting prices of its Mustang Mach-E, a direct competitor to the Tesla Model Y SUV.

Rivian, the California-based electric truck, van and SUV maker, reported a loss of $1.5 billion in the fourth quarter of last year, compared to a loss of about $1.7 billion during the same period in 2022. The company produced 57,000 vehicles last year and delivered 50,000 to customers. Scaringe boasted that Rivian produced the best-selling electric vehicle over $70,000 last year. In its shareholder letter, Rivian said it expected deliveries to be the same this year although it expects to achieve a “modest gross profit” by the end of 2024.

Rivian will unveil its new smaller and less expensive consumer models, the R2S SUV and R2T pickup, in March, but those vehicles are not expected to be in production until 2026.