Rivian lays off 140 employees to improve operational efficiency for R2

[ATLRivvy]

$250k per salaried employee is rule of thumb for most cost/savings calculations, and budgets. For salaried manufacturing job in Normal,IL this could be lower but most spreadsheets won’t care. A department will be asked to cut a certain percentage and use a number like this provided by finance to pick the HC impacted to meet the savings target.

huh? “$250k per salaried employee” is absolutely not a “rule of thumb” for cost savings calculations.

You don’t use a random “rule of thumb” for cuts to your own workforce and $250K would be an absurdly high one to use anyway. Most companies have less than 10% of employees at that total comp level - even fewer at a consumer focused manufacturer

Ive led or been involved in cost-cutting initiatives at a couple dozen companies now

Sponsored

 

[Who-Dat]

140 people is 35million savings. People are one of the most expensive parts of business operation. It’s common at the macro level. Sad and difficult at the micro level. Bottom line no one is guaranteed a job, plan accordingly.

WOW... I agree with you 100%..... There is no more Locality

 

[Revo]

Per Chat GTP this is my new brain!
Layoff savings.

For an assembly-line worker at Rivian, here's a breakdown of what the average compensation package looks like — including both pay and benefits (i.e., total cost to the employer):


---

1. Base Hourly Wage

Rivian assemblers earn an average of $21.72/hour per Indeed, which is about 31% above the national average for similar roles .



---

2. Annual Base Salary

Assuming a standard full-time schedule (40 hr/week × 52 weeks), that equates to around $45,000/year.



---

3. Benefits & Indirect Compensation

For U.S. manufacturing jobs, benefits often add 40‑60% on top of base wages, including:

Health insurance

Retirement contributions (401(k), pension)

Paid time off (vacation, sick leave, holidays)

Other perks (disability coverage, training, etc.)


Estimating conservatively at 50%, that adds about $22 per hour in benefits — nearly doubling the labor cost to around $44/hour.

For a 40-hour workweek, that’s approximately $88,000/year in total compensation package cost.


---

4. Industry Context

U.S. auto assembly workers at unionized plants (like Ford, GM, Stellantis) receive a total of about $60/hour when benefits are included .

Rivian’s package is likely lower than Big Three union levels, but still consistent with $40–$50/hour as a total value.



---

5. Summary Table

Compensation Component Approx. Value

Base wage $21.72 / hour
Base salary (annual) ~$45,000
Benefits & overhead +50% (~$22/hr)
Total labor cost ~$44 / hour
**Total package (annual)** **~$88,000 / year**



---

Why Employers Value Benefits This Way

Benefits like health insurance and retirement are essential for competitiveness, lower turnover, and to stay aligned with automotive industry standards .


---

Bottom Line

At Rivian—based on reported wage data—the total cost to the employer for an assembly-line worker is likely in the ballpark of $40 to $50 per hour, or roughly $80,000 to $100,000 a year, when factoring in all benefits and overhead.

 

[Revo]

If Rivian lays off 140 assembly-line workers, the approximate annual cost savings can be estimated using the total compensation per worker.


---

Calculation Assumptions:

Total annual cost per worker (wages + benefits): ~$88,000 (from prior estimate)

Number of workers laid off: 140



---

Estimated Total Annual Cost Savings:

140 workers times 88,000 = $12,320,000 dollars/year


---

Notes:

This is before considering any severance packages, unemployment insurance contributions, or rehiring costs.

Short-term savings may be less if severance or benefits continuation (e.g., COBRA) is included.

Long-term savings may increase if roles aren’t replaced or if Rivian shifts toward automation or restructuring.

 

[ActionableDave]

Absolutely not. The total loaded cost of an employee- which of course will vary widely - is closer to 140% of comp.

And that’s on the high end, I favor 130% for estimates of burden and additional miscellaneous expenses/investments.

 

[SDH]

Thankfully it wasn't servicing team laid off!

 

[ndmiller]

Rivian has 550 open jobs, 42 in Normal. Since laid off workers can apply within the company, not sure it's 100% net 140 job loss.

 

[Mark_AZR1T]

It sounds like a declining stock valuation move to me....

 

[Rivian R2D2]

It’s normal, no pun intended.

In 2005, General Motors announced it would cut 30,000 hourly jobs and close 12 North American facilities due to declining sales and financial losses, which significantly impacted its workforce and operations. This decision was part of a broader struggle within the company to adapt to changing market conditions.

ABC News (2005).

Hope it’s not the networked Rivian line workers. When GM employees learned that GM was cutting people the floor workers were found putting their lunch, dirty rags, tools, and trash in the cylinders blocks and leaving off parts left and right on finished vehicles.

*Don’t insult the one who prepares your food.

Same respect goes for here.

Sponsored