Rivian layoffs to hit hundreds, but Georgia impacts expected to be small
Electric vehicle maker Rivian, which plans a corporate hub and a $5 billion EV factory in Georgia, reportedly plans to lay off hundreds of workers as it looks to trim costs.
The company is looking to reduce expenses as it prepares to start production of a lower priced crossover, known as the R2, and faces stiff headwinds caused by economic uncertainty and reduced government support for the consumer transition to EVs.
“With the launch of R2 in front of us and the need to profitably scale our business, we have made the very difficult decision to make a number of structural adjustments to our teams,” Rivian CEO RJ Scaringe said in a memo to employees obtained by The Atlanta Journal-Constitution. The memo said Rivian will cut about 4.5% of its workforce, a figure The Wall Street Journal, which first reported the cuts, put at more than 600.
The cuts will result in changes to Rivian’s vehicle servicing, delivery and marketing departments. A small number of jobs in Georgia are likely to be affected, but the vast majority of cuts are expected elsewhere, a person familiar with the matter told the AJC.
“These changes are being made to ensure we can deliver on our potential by scaling efficiently towards building a healthy and profitable business,” Scaringe’s memo said. “I am incredibly confident in R2 and the hard work of our teams to deliver and ramp this incredible product.”
The announcement does not appear to significantly impact the planned Georgia factory or the Atlanta corporate hub.
In September, Rivian held a ceremonial groundbreaking to mark the start of vertical construction of its planned EV factory about an hour east of Atlanta. The factory and promised 7,500 jobs have been delayed for years as the company has weathered supply chain issues and steep financial losses, but the company has insisted it will build the plant and meet its jobs and investment promises.
“There’s been some moguls along the way. But we’re excited to be here and to see this day come,” Scaringe said during the Sept. 16 groundbreaking ceremony.
Rivian’s Georgia factory is a major bet on its future. Scaringe has repeatedly said Rivian’s path to profitability will be powered by ramping up vehicle production, especially models offered at midrange prices.
Rivian’s flagship vehicles, the luxury R1T truck and R1S SUV, generally did not qualify for the most recent $7,500 federal tax credits, which the Trump administration ended in September. But the R2, a lower cost model, would have, had the consumer incentives not been eliminated.
The automaker expects to start R2 production at its sole factory in Illinois next year. The Georgia factory, in southern Morgan and Walton counties along I-20 near Social Circle, is expected to expand production of the R2 and be the site of future vehicle models, including the smaller R3.
In July, Rivian said it had signed a lease to establish an East Coast headquarters along the Atlanta Beltline. Rivian has said that office will eventually employ 500.
The EV startup is expected to announce third quarter results early next month. Cox Enterprises, which owns the AJC, also owns about a 3% stake in Rivian.
Though Rivian is not profitable, it has notched two significant financial agreements to help the company move forward with its Georgia factory.
Rivian inked a software partnership worth an estimated $5.8 billion with Volkswagen, providing a new funding stream for the startup. The U.S. Department of Energy’s Loan Programs Office also finalized a $6.6 billion construction loan to help finance Rivian’s Georgia plant in the waning days of the Biden administration.
Though criticized by some of Trump’s allies, Scaringe has said as long as Rivian meets its terms of the loan agreement, it’s a settled matter.
About the Author
J. Scott Trubey is the senior editor over business, climate and environment coverage at The Atlanta Journal-Constitution. He previously served as a business reporter for the AJC covering banking, real estate and economic development. He joined the AJC in 2010.
