Electric vehicle manufacturer Rivian (NASDAQ:RIVN) announced on Wednesday that it has reduced its workforce by about 1%, marking the second round of job cuts this year. This decision comes amidst a broader slowdown in electric vehicle demand, prompting the company to focus on cost reduction efforts.
Shares of Rivian, initially up as much as 3.4% during the day, nearly erased all gains following the news.
In an email to Reuters, Rivian stated, “This was a difficult decision, but a necessary one to support our goal to be gross margin positive by the end of the year.” The layoffs primarily targeted staff supporting the business. This move follows a 10% layoff at Rivian in February, following a disappointing 2024 production forecast.
Cost reduction is imperative for Rivian, especially with high interest rates curbing consumer demand for electric vehicles, which are typically pricier than their gas-powered counterparts. The company has been implementing various cost-saving measures, including in-house part production, renegotiating supply contracts, and temporarily shutting down production lines for efficiency upgrades.
Last month, Rivian introduced its smaller, less expensive R2 SUVs and shifted production to its existing U.S. factory instead of constructing a new plant, aiming to expedite deliveries in the first half of 2026 and save over $2 billion.
However, Rivian’s shares hit a record low on Tuesday amid growing concerns about weakening consumer sentiment towards electric vehicles. Several companies heavily invested in electric vehicles are now slashing prices to stimulate demand and cutting costs to mitigate cash burn. Market leader Tesla recently announced layoffs of more than 10% of its global workforce, while Ford reduced prices of certain variants of its F-150 Lightning electric pickup truck by up to $5,500.
Rivian, scheduled to report first-quarter results on May 7, has seen its shares plummet by nearly two-thirds since the beginning of the year.
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