Rivian Automotive Inc. is “not immune to economic conditions” and is readying a plan to cut costs, Chief Executive RJ Scaringe told employees in a letter made available Tuesday.
The Wall Street Journal reported on Scaringe’s letter earlier Tuesday, following a Bloomberg report on Monday about the cost-cutting plan and possible layoffs.
In his letter, Scaringe said that the electric-vehicle startup
RIVN,
is “working to focus our business in order to stay ahead of the changing economic landscape,” as detailed in a company-wide meeting.
“We are financially well-positioned and our outlook remains strong, but to fully realize our objectives it is critical that our strategy supports our sustainable growth as we ramp towards profitability,” Scaringe said.
Rivian is prioritizing “certain programs (and stopping some), halting certain non-manufacturing hiring and adopting major cost-down efforts to reduce material spend and operating expenses,” he said, without detailing which programs could get the ax.
“We will always be focused on growth, however, Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably,” the CEO said.
Rivian would follow several tech and other companies that have announced or plan job cuts as as executives and investors fret about inflation, ongoing supply-chain snags and a potential recession.
Tesla Inc.
TSLA,
in late June laid off about 200 employees connected to its Autopilot driver-assistance system and shut down an office in San Mateo, Calif.
Coinbase Global Inc.
COIN,
Netflix Inc.
NFLX,
and Twitter Inc.
TWTR,
are among several others either announcing layoffs or planning to limit hiring.
Rivian is expected to report second-quarter results next month. Analysts polled by FactSet expect the EV maker to report an adjusted loss of $1.62 a share on sales of $334 million.
That would compare with an adjusted loss of 66 cents a share in the second quarter of 2021, when Rivian was a pre-revenue company.
Shares of Rivian have lost 71% so far this year, compared with losses of nearly 20% for the S&P 500 index
SPX,
in the same period. The company’s stock soared on its stock-market debut in November, when its first trade was $106.75, and are down some 72% since then.
