Inflation and global supply chain constraints continue to take their toll on electric car manufacturers, especially those based in the United States. Young automakers such as Rivian and Arrival have announced plans to restructure their businesses, hinting at potential layoffs. Meanwhile, EV veteran Tesla laid off hundreds of employees last month and continues to do so.
Rivian to address potential layoffs with employees on Friday
Last we heard, Rivian reported an optimistic increase in electric vehicle production last quarter, building a total of 7,969 electric vehicles since production began late last year. See the article : USDA Identifies Feeding Families by 2022 Helping Combat Food and Nutrition. At the same time, Rivian reiterated that the production target of 25,000 vehicles this year is still achievable.
Despite the need for significantly higher growth in the second half of 2022, CEO RJ Scaringe said Rivian’s new results show the company is addressing its previous supply chain and manufacturing issues.
According to a recent Reuters report, Scaringe sent an email to employees on Monday night, alerting them to plans for a briefing this Friday to discuss possible layoffs. Furthermore, Scaringe shared that Rivian plans to discontinue certain internal programs as part of the company’s restructuring.
With those details still fairly vague, we don’t want to speculate before Friday, but the restructuring could further cut costs and optimize operations as it looks to ramp up production of electric vehicles to make a strong pivot to its 2022 production targets. At the end of the first quarter Rivian had more than $16 billion in cash on hand, so the potential layoffs appear to be a precautionary measure to stay as lean as possible.
Arrival announces reorganizing of business
Similar to Rivian, UK-US-based commercial EV maker Arrival is making some internal adjustments to meet increased production of its van this year. In a press release this morning, it proposed a “reorganization of its operations in response to a challenging economic environment.”
The reason for the turnaround is so the company can ensure the start of production of the Arrival Van sometime in the third quarter. On the same subject : Four ways a successful business can regularly challenge the status quo. Here is the official statement:
Arrival has proposed plans that include restructuring the organization to enable it to deliver on its business priorities by the end of 2023, primarily using $500 million in cash. Arrival’s proposal includes a targeted 30% reduction in spend across the organization and anticipates that this could potentially affect up to 30% of employees globally.
Unlike Rivian, Arrival has not yet used the word “layoffs,” but the phrase used above indicates that nearly a third of Arrival’s staff worldwide will feel some sort of impact. The company said it will share more details about its revised business strategy during its second-quarter earnings call on Aug. 11.
Tesla continues layoffs
Last month, we reported that Elon Musk had sent an email to Tesla executives, telling them they had to cut 10% of the workforce and pause hiring because of the CEO’s “super-bad feeling” about the economy. Read also : UNT Launches We MEAN Business Ticket Campaign – University of North Texas Athletics.
Musk later clarified the scope of the layoffs in an email to all employees, claiming the 10% cut would be applied to “payroll headcount” due to overstaffing after Tesla’s long growth phase. The layoffs continued through the end of June and, despite Musk’s promises, hit hourly employees in service, sales and delivery. In this regard, most of those laid off are actually salaried employees.
According to the same Reuters report, Tesla is closing its San Mateo, California office where staff developed the automaker’s Autopilot system. The filing indicates that 229 additional Tesla employees will be laid off as a result of the closure.
Funnily enough, a survey of 457 recently fired Tesla employees found that many of them had already moved on to Rivian and other smaller EV companies. Good luck!
All three of these companies have enough capital and exciting electric vehicles in their pipelines to stay afloat, so there isn’t much to worry about for now. However, these moves show that these automakers are not invincible and that supply chain issues are indeed taking their toll.
It makes you care about the smaller EV startups that are facing many of the same problems. What might be the worst factor in the above news is that so many people helping to drive electric vehicle adoption have lost their jobs, and a bunch more are about to. Let’s hope everyone recovers quickly.
FTC: We use automatic affiliate links to earn money. More.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.
You’re reading Electrek—the experts who break the news every day about Tesla, electric vehicles, and green energy. Be sure to check out our homepage for all the latest news and follow Electrek on Twitter , Facebook and LinkedIn to stay up to date. Don’t know where to start? Check out our YouTube channel for the latest reviews.
