Layoffs and other workforce reductions have marked auto industry headlines in recent months, despite increased vehicle sales last year and forecasted growth in 2024.

The staff moves signal recalibration after electric vehicle sales and autonomous technology performance have failed to keep pace with industry expectations, according to experts. Reduced EV capacity investments and delayed timelines have delayed, even canceled, some planned spending as the market struggles to find demand from mainstream

Meanwhile, higher labor costs, including from record labor agreements between the United Auto Workers and the Detroit Three, have increased expenses. Production volumes have been erratic from COVID-affected supply chains, the microchip shortage and last year's United Auto Workers strike. The threat of foreign competition, particularly from the Chinese, stresses the need to profitably produce low-cost EVs; right now, battery-powered models are more expensive to produce and have smaller margins — if they're profitable at all — than traditional gas-powered vehicles.

It's all a recipe for rebalancing budgets and cutting where companies can.

"Some of the cuts are related to a pivot from the first wave of EVs, which was get the vehicle out there, build capacity, go," said Mark Wakefield, manager director in Detroit for consulting firm AlixPartners, "to the second wave of 'Let's make a competitive EV' and even the third wave of 'Let's make money off this vehicle.' "

The result is a change in the dynamics of how companies are approaching their strategies.

"At first you're hiring as many engineers as you can. You're optimizing speed to market," Wakefield said. "In today's environment, it's less about speed to market, but having a compelling offering and cost of doing it. There may be some adjustments from doing that."

Estimates put U.S. auto sales in 2023 around 15.5 million, and several forecasters are expecting closer to 16 million in 2024. Electric vehicles could hit 10% market share this year, too. Still, the growth is less aggressive than what the industry expected a year or so ago, and that's affecting both blue- and white-collar jobs.

Just as it revealed its R2 model, Rivian Automotive Inc. last week said it's halting plans to build a multibillion-dollar factory in Georgia that was supposed to create 7,500 jobs. This move to save $2.25 billion comes after the California-based EV startup said it was cutting the third shift effective April 28 at its plant in Normal, Illinois, though all hourly employees were being offered jobs on the other two shifts. Rivian had said vehicle production was expected to be flat in 2024, but improvements in manufacturing processes would allow it to meet that goal with two shifts and save on costs. Rivian's net loss last year was $5.432 billion compared to $6.752 billion in 2022.

Rivian last month also said it was laying off 10% of salaried employees along with some non-manufacturing hourly employees. At the time, it had 16,700 hourly and salaried workers. It declined to provide a further breakdown.

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