Electric vehicle maker Rivian is planning a second round of layoffs this year amid a drop in demand for electric vehicles.
The Jeff Bezos-backed company cut 10 percent of its 16,790 employees in North America and Europe in February and now plans to lay off another 1 percent.
Bezos has invested $700 million in the automaker, making him the largest shareholder, and Amazon owns a 17 percent stake in the company.
The latest round of layoffs follows Tesla owner Elon Musk’s decision to cut a whopping 14,000 jobs in factories across the country this week.
The Rivian R1T pickup truck (pictured) has suffered a $3,100 price cut as global electric vehicle sales fall and companies rush to introduce cost-cutting measures.
Amazon founder Jeff Bezos invested $7 billion in Rivian in 2019 to receive a fleet of 100,000 electric vehicle delivery vans by the end of the decade.
Even though Rvian’s sales are set to double in 2023, it is said to be facing the same declines as other companies after EV enthusiasts have already bought its cars, meaning less enthusiastic car buyers won’t. They are joining the crowd in giving up their gas-guzzling alternative.
After Rivian’s job cuts, its shares fell from 3.4 percent on Wednesday to just one percent at the end of the next day.
“This was a difficult decision, but necessary to support our goal of being gross margin positive by the end of the year,” Rivian said. Business Insider.
Rivian laid off six percent of its workforce to cut costs in February 2023 and laid off 20 battery cell development workers in December of the same year.
The company has taken steps to reduce costs by manufacturing some of its auto parts in-house and renegotiating its supply contracts.
This comes as Rivian reduced the prices of its all-electric R1T pickup truck and R1S SUV by $3,100 each in response to a continuing trend of other companies lowering the prices of their electric vehicles.
Data showed that the company delivered more than 50,000 electric vehicles last year in total.
Last month, Rivian also announced it would pause construction on its $5 billion manufacturing plant that was set to open in Georgia in 2026.
Of the major electric vehicle makers, only BMW saw an increase in sales in the first quarter compared to the same period last year, but the German car giant’s share price still fell.
Tesla has seen a significant drop in sales in the first quarter of this year, selling 20 percent fewer electric vehicles than the previous quarter and eight percent year over year.
Tesla CEO Elon Musk laid off 10 percent of the company’s workforce this week, equivalent to 14,000 employees in factories across the United States.
Instead, the company decided to move production of its more profitable R2 EV to its existing plant in Normal, Illinois, saving it $2.25 billion.
The R2 is a smaller, less expensive SUV that costs $45,000 compared to the R1’s price of $76,700.
Rivian’s cost-cutting initiatives mirror Elon Musk’s decision to cut 10 percent of Tesla’s workforce, citing the company’s rapid growth and duplication of certain job functions as the reason for the layoffs.
“As we prepare the company for our next phase of growth, it is extremely important to examine all aspects of the company to reduce costs and increase productivity,” Musk said in a letter to staff.
Tesla has faced a decline in sales this year, according to its Q1 2024 report that revealed it delivered 20 percent fewer electric vehicles compared to the previous quarter, causing its shares to fall 4. 9 percent after the announcement.
‘Let’s call this what it is: while we were anticipating a bad [first quarter]”This was an absolute disaster in the first quarter that is hard to explain,” said Wedbush Securities analyst Dan Ives. Washington Post.
If Tesla doesn’t reverse its sales decline, Ives added: “There could clearly be some darker days ahead that could alter Tesla’s long-term narrative.”
DailyMail.com has contacted Rivian and Tesla for comment.