Rivian Automotive is laying off more than 600 employees, roughly 4.5% of its workforce, as the electric vehicle maker tries to get leaner before its most important product launch yet.

The cuts target non-manufacturing roles across service, sales, and marketing. CEO RJ Scaringe framed the decision as a necessary step toward operational consolidation ahead of the company’s lower-cost R2 SUV, which is targeted for production in 2026.

A year of steady trimming

This isn’t Rivian’s first round of layoffs in 2025. It’s not even the second.

Back in June, the company cut about 140 salaried manufacturing positions to sharpen efficiency at its production facilities. Then in September, another 1.5% of staff was let go as Rivian shifted resources toward the R2 program.

Now this October round dwarfs both of those efforts combined. With around 15,000 employees at the end of 2024, losing 600-plus workers represents the largest single reduction this year by a wide margin.

The tax credit hangover

The expiration of the US federal tax credit of $7,500 for EV purchases has dealt a real blow to demand across the industry.

Scaringe pointed to this demand decline as a driving factor behind the layoffs. In an internal email to employees, he laid out the case that the company needed to consolidate operations to weather the current environment.

The R2 gamble

Everything at Rivian right now orbits around one vehicle: the R2.

The company’s current lineup, the R1T pickup and R1S SUV, sit in the premium segment. The R2 is designed to be a more affordable entry point, targeting a much larger slice of the market.

Rivian appears to be threading the needle by keeping manufacturing roles largely intact while trimming from service, sales, and marketing. That’s a bet that the engineering and production side of the house matters more right now than the go-to-market side, for a company that’s still a year away from R2 production.