- On Wednesday, Rivian announced it would be cutting 10% of its workforce.
- However, employees have to wait until Thursday to find out if they're affected.
On Wednesday, electric carmaker Rivian announced it would be cutting 10% of salaried staff.
However, staff members were left in an overnight limbo, as the company said it would only be telling employees on Thursday morning if their role had been impacted.
"We know the timing here is difficult – waiting between now and tomorrow to understand whether you're impacted is far from ideal, but we want to ensure a considerate notification process that accommodates all time zones," Rivian's CEO RJ Scaringe wrote in an email to staff on Wednesday.
We asked HR professionals to weigh in on Rivian's cliffhanger layoff-email strategy.
Keeping the attention focused
One HR professional told Business Insider that the staggered announcements might be the company's way of keeping its attention focused.
"It is so difficult to retain confidentiality and prepare the needed legal documents and financial support for separated employees [so] some firms follow this methodology of letting everyone know the plan for the reduction in force," said Elaine Varelas, a managing partner at career-management firm Keystone Partners.
"The benefit is the next day the entire focus of communication and support is dedicated to the separating employees," Varelas told BI. "The following days are focused on retaining and re-recruiting other staff."
Rob Smedley, director for employment at UK law firm Freeths, also pointed out that Rivian may be trying to avoid media backlash by giving a one-day notice.
"The primary reason for delay in this case is likely to have been reputational damage limitation, with the backlash against large US employers who have recently dismissed employees with immediate effect and without warning in mind," Smedley told BI.
Some high-profile companies, including Google, X, and Cloudflare, have faced criticism over the speed of layoffs and the lack of notice given to employees in recent months. For instance, some Google workers last year found they'd been laid-off when their office access cards wouldn't work.
Such actions have resulted in some cases in social media backlash, and unhappy employees speaking out publicly about their poor experiences.
Drawbacks to making employees wait overnight to hear if they've been laid off
However, it is a less than ideal way to conduct layoffs because it worries both retained and separated employees, Varelas said. Employees need timely notice of their status and require severance and career transition support, she added.
Gearalt Fahy, an employment law expert at UK-headquartered law firm Womble Bond Dickinson, agrees with this view and told BI that a constructive layoff process should offer employees an initial consultation and support throughout.
A consultation period is a legal requirement when conducting layoffs in the UK, but not in the US.
Fahy explained that the approach is a "double-edged sword" because although the company may be pleasing shareholders, it could ultimately impact recruitment and retention.
"Millennial and Gen Z employees are looking for more than job security, they want a company with a moral compass, ESG strategies, and a good culture," Fahy said.
Michael Doolin, an HR director for over 30 years and managing director at Clover HR, added that Rivian's reputation will most likely suffer because of this approach to laying off staff, saying it "appears to be a crude attempt at managing pain."
"Sometimes, bad news shared in advance lessens pain. Leaders likely wanted to give people the opportunity to process the situation before giving them a definitive answer," he told BI.
In the aftermath of the layoffs, he said, employees who aren't laid off will become "disengaged, with their performance suffering since they will no longer feel valued or important and will worry that bad things could happen at any time."
"Productivity will invariably decline as a result, further impacting profits and creating a more negative cycle."
He added that Rivian has likely "eroded the trust" it has with employees, and the move will make it difficult for remaining employees to demonstrate commitment and dedication to the company, resulting in high levels of attrition over the coming weeks and months.
The Southern California-based electric carmaker has a total of 16,700 employees. It said in its 2023 Q4 financial report on Wednesday that the company saw a loss of $5.4 billion for the year, and that it plans to deliver about 57,000 EVs in 2024 — the same as in 2023.
When contacted by Business Insider, Rivian referred back to Scaringe's letter to employees.