Rivian, the California-based manufacturer of electric vehicles, has introduced a structured transition plan for employees affected by its latest workforce reduction, according to internal documentation obtained by Business Insider. The company is placing these individuals on paid administrative leave effective immediately, allowing them to remain on the payroll—with full salary and health benefits—for a period of 60 days. This decision illustrates Rivian’s attempt to align its financial strategy with humane corporate policies while navigating a difficult moment of organizational realignment.
In an internal communication sent to staff on October 23, CEO RJ Scaringe informed employees that roughly 4.5% of the company’s global workforce—equating to over 600 positions—would be eliminated. Scaringe attributed the layoffs to an overarching need to scale operations responsibly and reach sustainable profitability, particularly as Rivian prepares for the much-anticipated launch of its upcoming R2 SUV in the coming year. His message underscored the delicate balance between maintaining long-term growth prospects and addressing near-term operational efficiencies.
The company’s documents, specifically one labeled “Key Dates and Resources,” provide clarity on how the transition will proceed. They state that impacted employees will officially remain Rivian employees until December 23, 2024, continuing to receive both pay and company-sponsored benefits for the two-month administrative leave period. However, the payments distributed during this roughly 8.5-week window will later be subtracted from the total severance package offered at the end of employment, ensuring that compensation is allocated consistently across grade levels.
Severance amounts are calculated according to each employee’s tenure and job classification, internally identified as their “RIV Grade Level.” These grades span from Level 1 through Level 11, encompassing a broad range of positions across Rivian’s hierarchy. For instance, individuals categorized within Grades 1 through 4—typically representing entry-level engineers, coordinators, and mid-tier professionals—are eligible for up to 10 weeks of total compensation, inclusive of the paid leave period. In contrast, employees occupying higher structural tiers, such as Grades 8 and 9—which include leadership roles like principal engineers, department directors, and senior directors—will receive seven weeks of base pay in addition to four weeks for every year of completed service, bringing certain cases to a total of approximately 22 weeks’ compensation. At the uppermost level, Grades 10 and 11, which encompass vice president and comparable senior executive positions, may receive severance packages extending up to 28 weeks.
To receive these severance benefits, affected staff must sign a release agreement between December 23, 2024, and January 1, 2026, formalizing their acceptance of the terms. The inclusion of this extended signing window demonstrates Rivian’s interest in offering flexibility for employees to consider their options before finalizing the transition.
In a statement provided to Business Insider, Marina Hoffman, a Rivian spokesperson, explained that the company’s “band levels” mirror standard corporate structures used by many publicly traded companies. She emphasized that these classifications ensure transparency and consistency, correlating position titles with levels of responsibility and organizational impact. Hoffman also added that laid-off employees remain eligible for rehire and are explicitly encouraged to apply for other open roles within the firm—an effort to maintain connections with skilled personnel who may fit future business needs as Rivian scales production.
Further company guidance, contained in an “Employee FAQs” document, stipulates that eligible workers will continue receiving payments associated with patent-filing awards through their official separation date. However, any restricted stock units (RSUs) or unvested equity grants will be forfeited as of December 23. To assist with the transition, Rivian is offering professional career services, including résumé support and career coaching, starting immediately after the separation announcement. Hoffman, when asked about the specifics of individual severance amounts, declined to comment.
Speaking the day before the layoffs became public, CEO RJ Scaringe described to Business Insider that Rivian had reached what he called a critical “inflection point”—a defining period in the company’s evolution. He stressed that for Rivian to achieve its aspirational goal of producing millions of vehicles annually, it cannot rely solely on its current high-end product line, which includes vehicles priced near $90,000. Instead, the company must successfully launch more accessible models like the forthcoming R2 and, eventually, the R3. Scaringe highlighted that the R2 represents not only a key milestone but also the foundational step that could either propel Rivian into large-scale production or leave it confined to a smaller niche within the EV market.
This recent workforce reduction represents only one of multiple downsizing initiatives Rivian has undertaken in the past three years as part of its broader effort to manage costs and align growth with market realities. The decision also reflects broader challenges facing the electric vehicle sector, which has recently encountered deceleration in consumer demand and evolving federal policies that affect production incentives and consumer pricing. Following the expiration in September of the $7,500 federal tax credit previously available for EV purchases, many automakers—including Rivian—have had to consider new avenues for offering competitive price adjustments and financing options.
The situation parallels developments across the industry. For instance, General Motors announced plans to lay off approximately 1,750 employees amid what it referred to as “slower near-term EV adoption” and a shifting regulatory landscape. A GM spokesperson emphasized that the company was modifying its EV capacity to match market conditions yet reaffirmed its dedication to maintaining a strong domestic manufacturing base.
Rivian’s latest actions thus exemplify the difficult balance between strategic constraint and forward-looking ambition. As the company prepares to expand its vehicle lineup while weathering market turbulence, its decision to implement structured severance and transitional support demonstrates a continued effort to uphold integrity, transparency, and compassion toward employees, even while pursuing the efficiencies necessary for long-term survival in a rapidly evolving EV economy.
Sourse: https://www.businessinsider.com/rivian-layoffs-employee-severance-package-2025-10
