Rivian Automotive is laying off 6% of its workforce as part of an effort to prepare for what's quickly becoming an EV price war between automakers. Both Tesla and Ford have already announced price cuts while other brands, such as Volkswagen, remain adamant they won't do the same. But Rivian, likely because of its startup status, is refusing to take any chances. It also has to contend with a currently weak economy in order to help preserve its cash reserves. Rivian has around 14,000 employees, about 840 of whom are being let go.

An email sent to employees by founder and CEO R.J. Scaringe was obtained by Reuters. "We must focus our resources on [ramping up production] and our path to profitability," Scaringe wrote. Improving the automaker's operating efficiency is a "core objective."

He also apologized to employees for the cuts and confirmed manufacturing jobs at Rivian's Illinois factory are not affected. Those factory workers are needed in order to increase production of the R1T and R1S as well as the all-electric delivery vans for Amazon. Rivian is also working on the smaller R2 platform, a critical component of the company's future that's been delayed until 2026.

It does not appear those assigned to the R2 project are affected by the layoffs, as Scaringe wrote that "The changes we are announcing today reflect this refocused roadmap." Rivian has been losing money on every vehicle it produces, and it barely missed its 2022 production target. It blamed this largely on pandemic-related supply chain problems.

Plans still appear to remain in place to build a new $5 billion manufacturing facility in Georgia, a critical component to Rivian's production future. Rivian's cost-cutting measures are nothing new. In December, it paused a commercial van deal with Mercedes that would have seen the pair jointly invest and operate a new EV van factory in Europe. It also laid off some staff last summer.

At present, Rivian's market valuation stands at $17.8 billion and, as of September 30, had $13.27 billion worth of cash and cash equivalents on hand. A year prior that figure stood at $18 billion. Rivian went public in late 2021 and raised almost $12 billion but its shares have since lost almost 90% of their value, hence the decision to slow down expansion plans.