Are Rivian's Job Cuts a Red Flag?

Daniel Miller, The Motley Fool

Sat, Jul 12, 2025, 8:45 AM 5 min read

• Rivian recently made job cuts to improve operational efficiency.

• The EV maker needs its R2 model to be a success and revive its sales.

• The R2 will also be Rivian's ticket overseas, where it's planning a big push.

• 10 stocks we like better than Rivian Automotive ›

Oftentimes, when a young company such as Rivian Automotive (NASDAQ: RIVN) slashes jobs, it's not a good thing. That makes it understandable for some investors to glance at headlines and assume Rivian is in worse shape than we all thought.

But let's slow down, bring in some of the numbers, and explain what's going on. Investors will feel much better in the end.

A couple of weeks ago, Rivian laid off around 140 employees, or about 1% of its total workforce, according to TechCrunch. "We have made the difficult decision to reduce a small number of our salaried manufacturing employees as part of an ongoing effort to improve operational efficiency for R2," a spokesperson wrote to TechCrunch.

Right off the bat, as awful as it is for any job cuts, the small number is better for investors -- the automaker started the year with a little over 14,800 workers in North America and Europe. Investors can only hope that the efficiencies created are real and tangible because the company is heavily relying on its R2 to boost sales and help push the company toward profitability.

Rivian could use a boost in sales, as you can see in the graphic below. Also note the progress in gross profits despite the stagnating sales, which is due to its moves to cut costs and create efficiencies.

Not on the graphic are Rivian's second-quarter delivery results, which declined 23% compared to the prior year. Rivian still confirmed its 2025 delivery guidance for between 40,000 and 46,000 vehicles.

The concern for investors is that Rivian is relying on a strong second half to hit its delivery mark, and that means more risk for investors. Rivian delivered 19,301 vehicles in the first half of 2025, down 30% compared to the prior year, leaving it needing roughly 24,000 cars in the second half of 2025. In other words, Rivian needs to boost its deliveries by 23% in the second half to meet the midpoint of its guidance.

For investors, the R2 can't get here soon enough. With zero vehicle launches due before that point, 2025 sales are in a bit of limbo. It doesn't help that Rivian's sales stall comes at a time when the current government administration is making it clear it wants to push back on electric vehicle (EV) incentives.