Rivian and GM announce layoffs to cut costs
Rivian and General Motors have reportedly announced layoffs, citing business realignments and cost-cutting measures as the cause behind the cuts.
Rivian plans to lay off 600 employees, or about 4.5% of its workforce, while on Friday, GM laid off roughly 1,000 of its workers in Detroit, Michigan, according to CNBC.
The Wall Street Journal broke the Rivian news on Thursday by citing an email they viewed that CEO RJ Scaringe sent to his employees.
“These are not changes that were made lightly,” the WSJ quotes Scaringe as saying. “With the changing operating backdrop, we had to rethink how we are scaling our go-to-market functions.”
A CNBC report adds that Scaringe said “the changes will ensure the company ‘can deliver on our potential by scaling efficiently towards building a healthy and profitable business,’ as it prepares to launch its new R2 models, which are expected to begin production next year.”
“This news is challenging to hear, and the hard work and contributions of the team members who are leaving are greatly appreciated,” the report quotes Scaringe as saying.
Rivian lost $1.1 billion in Q2, and “because of some of the recent changes associated with regulatory credits and its second quarter performance,” the company increased its guidance for adjusted EBITDA losses for the full year to $2–2.25 billion, according to an Aug. 5 press release.
The release states that during the quarter, the OEM produced 5,979 vehicles at its manufacturing facility in Normal, Illinois, and delivered 10,661.
“Production during the second quarter for both R1 products and commercial vans was limited primarily due to a variety of supply chain complexities, partially driven by shifts in trade policy,” the release says.
CNBC adds that, in Scaringe’s Oct. 23 email, the CEO said “the changes will ensure the company ‘can deliver on our potential by scaling efficiently towards building a healthy and profitable business,’ as it prepares to launch its new R2 models, which are expected to begin production next year.”
GM layoffs
CNBC reports that GM laid off roughly 1,000 employees on Friday in an attempt “to cut costs and realign priorities amid changing market conditions,” which was attributed to a person familiar with the decision.
“The layoffs, which were announced Friday morning to those impacted, were across the business,” the article states. “Some were due to poor performance, while others were part of a review to reorganize priorities by the automaker, according to the person, who agreed to speak about the decision on the condition of anonymity,” the article states.
“A majority of the employees impacted were salaried workers in suburban Detroit at the automaker’s global technical center in Warren, Michigan, the person said. The United Auto Workers said about 50 union members were included in the layoffs.”
GM confirmed the layoff to CNBC but didn’t provide the number of workers it affects.
“In order to win in this competitive market, we need to optimize for speed and excellence,” said GM spokesperson Kevin Kelly, in an emailed statement to CNBC. “This includes operating with efficiency, ensuring we have the right team structure, and focusing on our top priorities as a business. As part of this continuous effort, we’ve made a small number of team reductions. We are grateful to those who helped establish a strong foundation that positions GM to lead in the industry moving forward.”
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