your current location is：Home > carHomecar

Rivian, a new car company invested by Amazon and Ford, has also joined the layoffs!

Recently, foreign media The Verge reported that Rivian spokesperson Amy Mast confirmed in an email that the company is laying off about 6% of its 14,000 employees, or about 800 people. She said Rivian was cutting jobs in part to speed up development of new versions of its electric trucks and SUVs.

After that, Rivian employees posted on LinkedIn one after another saying that they had been laid off and needed to find new jobs. According to statistics, most of the laid-off jobs do not involve jobs directly related to manufacturing, which means that Rivian's production capacity will not be greatly affected in the short term.

It is understood that Rivian's major layoffs may be related to its poor financial situation and difficult to increase production capacity.

Rivian's first-quarter earnings report showed that Rivian not only suffered a severe loss in the first quarter, but also struggled with deliveries. Although for Rivian, it currently has nearly 200,000 pre-orders (half of which are from Amazon), but it has repeatedly stated in its earnings report that this year's production capacity is only 25,000 vehicles.

And Rivian isn't the only company making layoffs. In recent months, due to the epidemic and other reasons, several car companies have laid off many employees. Ford Motor is reportedly considering cutting 8,000 jobs, and Tesla has announced plans to cut 10% of its workforce.

Still, Tesla has proven that despite the layoffs, it can still roll vehicles off the assembly line at scale and guarantee sales of hundreds of thousands of vehicles a quarter. But for Rivian, capacity is still a big issue.

So, who did Rivian lay off in this layoff storm that didn't involve manufacturing jobs? Why the layoffs? How have Amazon and Ford been affected? What is Rivian going to do next?

1. Layoffs of 6% The positions of the laid-off employees vary

Earlier, Bloomberg reported that Rivian's leadership was planning to lay off non-manufacturing jobs that have grown as the company has grown.

Rivian's CEO, RJ Scaringe, emailed employees after the report said Rivian has been making changes recently to try to cut costs.

▲RJ Scaringe

Rivian spokesperson Miranda Jimenez sent a copy of the email to The Verge earlier this month:

We've implemented reforms across Rivian, including prioritizing certain projects (and discontinuing some), halting hiring for certain non-manufacturing positions, and aggressive cost-cutting measures to reduce raw material expenses and operating expenses. We also began to adjust our organizational structure to ensure that we were focused, flexible and efficient enough to achieve our priorities and goals.

▲A copy of the mail

The so-called "cost-cutting measures" of Rivian's spokesperson, of course, also include the fastest "layoffs", which were announced and implemented recently.

"Today we announced the difficult decision to reduce the size of the Rivian team by approximately 6%, a decision that will help align our workforce with our critical businesses," Rivian spokesperson Amy Mast said in an email. Professionals are aligned, including strengthening consumer and commercial vehicle programs, accelerating development of the R2 and other future models, advancing our go-to-market plans, and optimizing spend across the business."

▲Amy Mast's Twitter page

At present, the "#rivianlayoffs" (Rivian layoffs) entry on LinkedIn has been followed and posted by nearly 100 people. The posts show that the layoffs were mostly product designers, project managers and operations at Rivian.

▲ "Curied post" under the entry #rivianlayoffs

Under the "Launched Post", there are also company employees such as GM and Lucid throwing olive branches. It seems that Rivian's departing employees are still quite popular with large companies. In addition, LinkedIn user Ashley Taylor also kindly collected information on Rivian's laid-off employees to help them find jobs quickly.

▲The recruitment information released by the general semiconductor director

It can be seen from the table of Ashley Taylor statistics that there are already 37 former Rivian employees who want to find jobs, and their original positions in Rivian are also various, including: software engineer, mechanical engineer, project manager, procurement, operations, testing, Recruitment, design and quality review, etc.

▲A table of Ashley Taylor statistics

At present, under the Rivian layoffs entry, new laid-off employees are posting posts looking for jobs. However, there are still traces of Rivian layoffs this time.

2. Serious losses, stock prices plummet, and there are still tens of billions of dollars in cash

But it has to be said that Rivian is still in dire straits. Rivian's first-quarter financial report shows that the revenue in the first quarter was only 95 million US dollars (about 640 million yuan), while the net loss has reached 1.59 billion US dollars (about 10.77 billion yuan). Although Rivian has delivered 1,227 vehicles to customers in the past three months, total deliveries have only reached 2,148.

▲Rivian's first-quarter comprehensive loss

In addition, Rivian's performance in the stock market has not been satisfactory in addition to its heavy losses.

It is understood that Rivian's share price has been sliding since its historic IPO in September last year. At that time, Rivian debuted on the public market with an overall valuation of over $80 billion (approximately RMB 541.48 billion).

However, in the first half of this year, Rivian's stock price plunged 75%, causing its investors to suffer huge paper losses. Among them are Amazon and Ford, which hold more shares in it. It is understood that the two together hold about 27% of Rivian's outstanding shares. As of the time of writing, Rivian's stock price has plummeted 65.92% in the first half of the year, and the US stock price has fallen to $35.01 per share (about 236.39 yuan per share).

▲Rivian stock price

Amazon reported that in the first and second quarters, Amazon had lost $11.5 billion (about 77.74 billion yuan) on Rivian. During the same period, Ford also lost $7.9 billion (about 53.41 billion yuan) on its investment in Rivian.

▲ Amazon’s loss on Rivian’s investment in the first and second quarters (Source: Amazon Financial Report)

Amazon's second-quarter financial report also showed that it has laid off about 100,000 employees, reducing the total number of employees by 6%. And how many of Amazon's layoffs have something to do with the losses caused by investing in Rivian.

Coincidentally, the losses caused by Rivian also indirectly accelerated the pace of Ford layoffs. According to reports on Ford layoffs, it can be seen that “Ford will cut a quarter of its employees and save $3 billion to focus on electrification.”

▲Ford employees

The car thing has also previously reported that after Ford’s loss in the first quarter of this year, it sold a total of 15 million Rivian shares in May, reducing its stake in Rivian to 9.7% and holding about 86.9 million Rivian shares. Ford initially held an 11.4% stake in Rivian, equivalent to 102 million shares.

Morgan Stanley analyst Adam Jonas is also not bullish on Rivian, noting that Rivian's enterprise value, which is basically its market capitalization minus net cash, " is just over $0 right now. " That sends a message to investors: Unless Rivian can control its supply chain, it may have to dilute shareholders.

▲Adam Jonas

In this regard, Rivian CFO Claire McDonough said that Rivian has $17 billion (about 114.98 billion yuan) in cash, which should allow it to increase production at its Normal plant in Illinois and eventually become profitable.

She added: "We have the ability to live within our means, and the profitability that the Normal plant can bring to Rivian, accelerate the continued growth of the business, and ultimately give us more flexibility in what method we use to raise additional capital in the future."

Rivian remains on track to launch its next electric vehicle platform, the R2, in 2025 at a new factory in Georgia, RJ Scaringe said. By then, the R2 will serve as the base platform for a new compact SUV that Rivian says will be more affordable than its first two vehicles, which both retail for more than $70,000. 4.73 billion yuan).

It is understood that Rivian's R1 platform is a dual-motor architecture that supports the electric pickup R1T and SUV R1S.

▲ Rivian's electric SUV R1S

3. The shortage of raw materials for orders exceeding 90,000 is expected to be solved

Although Rivian has encountered many problems, it is still relatively sufficient in terms of orders, and the problem of shortage of raw materials is gradually easing.

Rivian's most recent quarterly earnings report showed that it plans to produce 25,000 vehicles by the end of this year. Rivian, which is likely to report the latest numbers in its second-quarter earnings report on Aug. 11, is also ramping up production of pickups, SUVs and delivery vans for Amazon.

▲Overview of Rivian Factory

However, Rivian also said it now has more than 90,000 pre-orders for its R1T and R1S electric cars, up from the 83,000 it posted in March. Rivian added that it had produced about 5,000 vehicles as of May 9, including electric trucks, SUVs and delivery vans for Amazon.

▲Rivian R1T

Previous supply chain constraints and manufacturing woes also weighed on Rivian's progress. Like other automakers, Rivian has previously lacked lithium-ion battery materials and chips. But in conversations with investors, Rivian CEO RJ Scaringe said the supply chain disruption is coming to an end.

"We believe we've passed the worst, or the bottom of supply constraints, and now suppliers are moving closer to us (the raw material supply is plentiful)," Scaringe said.

Rivian also said that it will cancel the previous high goals and advance the plan step by step this year. Previous earnings reports showed that Rivian plans to build just 25,000 cars in 2022. In its first-quarter earnings report, Rivian said it remains on track to produce that number of vehicles this year.

When asked about the capacity and delivery gap, Rivian CFO McDonough explained that this is because Rivian's sales model is direct sales, with no dealers for distribution.

But while Rivian was the first to bring its electric truck, the R1T, to market, Ford has also started delivering the first F-150 Lightning electric pickup to customers, with other models to follow. Therefore, Rivian is facing huge sales pressure both in the electric pickup market and in other electric markets.

Conclusion: Rivian trapped by capacity

It has only been nine months since Rivian changed from a popular fried chicken in the stock market to today's "leek stock". As for why it fell from the altar, it may be related to Rivian's continued difficulty in improving production capacity.

However, as an electric car company, Tesla has survived the difficult "raw material shortage", while Rivian is still struggling and cannot guarantee a substantial increase in production capacity this year. This will only disappoint investors, which in turn will lead to a reduction in the amount invested.

If Rivian fails to bring hope to investors next, layoffs may continue to expand.