Electric vehicle manufacturer Rivian announced on Wednesday that it has reduced its workforce by about 1% in its second round of job cuts this year, as it aims to lower costs amidst a broader slowdown in electric vehicle (EV) demand. The news caused Rivian’s shares, which had risen as much as 3.4% earlier in the day, to almost completely erase their gains.
“This was a difficult decision, but a necessary one to support our goal to be gross margin positive by the end of the year,” Rivian said in an email to Reuters, stating that the cuts were primarily focused on staff supporting the business.
The move follows a 10% reduction in the workforce at Rivian in February, which came after the company disappointed investors with a lower-than-expected 2024 production forecast. Rivian is striving to reduce costs as high interest rates aimed at curbing inflation have dampened consumer demand for EVs, which are typically more expensive than their gas-powered counterparts.
Rivian has been implementing cost-cutting measures such as manufacturing some parts in-house and renegotiating supply contracts. It has also temporarily halted its production line to upgrade and increase efficiency, further reducing costs.
Last month, the company introduced its smaller and more affordable R2 SUVs, announcing that it would produce them at its existing U.S. factory instead of building a new plant. This move is expected to expedite deliveries in the first half of 2026 and save the company more than $2 billion.
However, Rivian’s shares hit a record low on Tuesday amidst growing concerns about weakening consumer sentiment towards EVs. Companies that heavily invested in an all-electric future are now slashing prices to stimulate demand and cutting costs to preserve cash.
Market leader Tesla is reportedly laying off more than 10% of its global workforce, as revealed in an internal memo seen by Reuters on Monday. Ford (F.N) also recently reduced prices on some variants of its F-150 Lightning electric pickup truck by up to $5,500, the Detroit automaker announced last week.
