The American manufacturer Lucid Group, which makes the high-end all-electric Air sedan, announced in a regulatory filing that it is restructuring and reducing employment by 18%.
By the end of the second quarter, all 1,300 affected employees will have been let go. As previously indicated, the figure represents 18% of the 7,200-person workforce. While many other businesses also made layoff announcements in preparation for the coming crisis, this one may have been the largest in terms of percentage. With Tesla’s aggressive price cuts and legacy automakers introducing more affordable EVs, startups like Lucid and Rivian are facing big challenges.
In relation to its restructuring plan, Lucid anticipates charges of between $24 million and $30 million, specifically for severance pay, employee benefits, and stock-based compensation. The layoffs will cut across the entire organization including executive positions.
Employees were informed via email by CEO and CTO Peter Rawlinson that the restructure was necessary due to “changing business needs and efficiency improvements.” He said that the action is in line with a cost-cutting announcement made back in February. The email claims that although the company has cut costs, it was not enough to prevent layoffs.
As a result, Rawlinson commented, “We’ve made the difficult but necessary decision to part ways with some of our excellent team members.”
While Lucid exceeded initial expectations in terms of car production in 2022, the prognosis for 2023 is far beyond what industry observers had predicted. Lucid stated that its goal for this year is between 10,000 and 14,000 automobiles, which is much lower than the 21,815 units predicted by analysts.
