Rivian trims 4.5% of workforce but spares its manufacturing line as it prepares R2 SUV
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Rivian Automotive has announced plans to reduce its workforce by 4.5 percent, or roughly 600 to 700 positions, as it restructures its operations in preparation for the launch of its more affordable R2 sport utility vehicle. The affected roles are mainly in non-manufacturing departments, with factory jobs at Rivian’s Normal, Illinois plant left untouched.
The workforce reduction comes as part of a larger reorganization aimed at cutting costs, simplifying operations, and realigning the company’s go-to-market strategy. In a memo to employees, CEO R. J. Scaringe noted that the changes are intended to help Rivian scale more efficiently and move toward building a healthy and profitable business.
Focused cuts in commercial operations
Departments most affected include vehicle operations, which are being folded into Rivian’s service team, and the company’s delivery and mobile operations, which are being merged with its sales function. The marketing department is also being streamlined into a single unit. These changes have prompted Scaringe to temporarily step in as interim chief marketing officer.
“These are not changes that were made lightly,” Scaringe wrote in his message to staff. “With the changing operating backdrop, we had to rethink how we are scaling our go-to-market functions.”
The timing of the layoffs reflects a broader trend in the electric vehicle sector, where companies are facing cost pressures and shifting consumer demand. Rivian has faced headwinds throughout 2025, including the phasing out of the federal EV tax credit, which has softened demand across the market.
Rivian had previously reduced its workforce by 1 percent in June and by 1.5 percent in September. These reductions were smaller in scale and affected different departments, including a June round that targeted 140 salaried roles in manufacturing support. At that time, the company cited efforts to eliminate process inefficiencies ahead of R2 production.
Manufacturing remains a priority
In contrast to the commercial cuts, Rivian’s manufacturing teams are being protected, signaling the strategic importance of keeping production capacity intact. The R2, Rivian’s next-generation electric SUV, is expected to begin production in the first half of 2026 and will launch with a starting price of $45,000. This is a substantial decrease compared to the current R1S model, which begins at nearly $77,000.
By focusing reductions on upper-funnel commercial roles and preserving its production line, Rivian appears to be prioritizing long-term growth over short-term headcount optimization. The approach reflects confidence in the company’s ability to scale production and deliver on its upcoming vehicle platform.
Industry analysts have noted that the company’s long-term prospects hinge on the successful launch and adoption of the R2, which is aimed at a broader and more price-sensitive segment of the EV market. While Rivian has earned praise for the quality and performance of its current R1 vehicles, their premium price points have limited mainstream adoption.
Financial and market positioning
Investors have responded cautiously to the restructuring news. Rivian’s stock dipped slightly to close at $13.00 per share on the day of the announcement, although it finished the week up 1.3 percent overall.
Rivian’s delivery guidance for the year has also been revised, now expected to range between 41,500 and 43,500 vehicles, down from earlier projections. Combined with growing market competition and reduced consumer incentives, the company is under pressure to execute both operationally and strategically.
Still, analysts say Rivian’s decision to preserve its manufacturing workforce sends a strong signal that it is preparing seriously for its next growth phase. The R2 is expected to be a make-or-break product that will determine whether the company can transition from a niche premium brand to a volume player in the EV space.
Scaringe acknowledged the emotional toll of the layoffs in his memo, thanking the employees affected for their contributions and emphasizing the company’s commitment to a disciplined path forward.
Preparing for the next chapter
Rivian is now at a critical juncture. The company is consolidating its commercial structure, realigning internal resources, and doubling down on manufacturing capacity, all while preparing to enter a new market segment. The success of the R2 will likely define the next chapter of Rivian’s evolution.
As other electric vehicle makers retreat or slow expansion amid economic and policy uncertainty, Rivian is opting for targeted internal change. Rather than broad, reactive cuts, the company is selectively trimming overhead while protecting the factory floor. If the R2 rollout is successful, this approach could position Rivian as one of the few EV startups to transition from promise to profitability.
Sources:
25 News Now