Parts Shortages Lead to 6% Workforce Reduction, Restructuring at Rivian

Rivian Factory 9 photos
Photo: Rivian
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The company's announcement Wednesday comes as the automaker continues to grapple with scaling its sole factory producing the R1T pickup truck, R1S SUV, EDV500, and EDV700 delivery vans.
The parts shortages have slowed production dramatically, although Rivian did improve second-quarter output to 4401 vehicles compared to 2553 to start the year.  Despite the shortages, the company still expects to reach the 25,000 mark by the end of this year. However, reaching their goal would only be half of the facility's production capacity.

The company reportedly has 14,000 people on its payroll. A 6% reduction would eliminate approximately 840 jobs. The cuts are part of a restructuring process aimed at better aligning its workforce with business objectives and will not impact jobs at the Normal, Illinois factory.

Laid-off employees will receive fourteen weeks of severance pay, health coverage through the end of the year, their next quarterly equity vesting, and job placement assistance.

CEO RJ Scaringe wrote employees a note two weeks ago regarding a restructuring plan, and details of the terms, including layoffs, would be announced soon.

The note shared with Automotive news read in part, "Rivian is not immune to the current economic circumstances and we need to make sure we can grow sustainably."

In concert with ramping up production of its pickups and SUVs, the company is also focused on speeding up the development of its R2 platform of vehicles. The new generation will come in at a lower price point than the R1 vehicles and be manufactured at a planned factory in Georgia.

In May, the company stated that it had over 90,000 pre-orders for its R1T pickup and R1S SUV. In addition, an initial order of 100,000 of its EDV500 and EDV700 delivery vans from Amazon is also on the books and currently in production. Those production delivery vans began rolling in multiple cities across the U.S. last week.
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