Electric vehicle startup Lucid Group announced plans to cut 18% of its current workforce, which equates to about 1,300 employees. The move is apparently part of the company’s effort to focus its resources on launching its second model in 2024.
By the end of Q2 2023, Lucid intends to complete the layoff of 18% of the employees affected.
“We are also taking continued steps to manage our costs by reviewing all non-critical spending at this time.”
Lucid Group CEO Peter Rawlinson
The news is unsurprising, considering its 2023 forecast failing to meet analysts’ expectations. It also revealed a significant decline in orders in Q4 2022.
Scope
Lucid Group CEO Peter Rawlinson sent an email to the employees on Tuesday. It announced that the layoff would cover the company’s US operations.
Interestingly, the company also intends to lay off some of its executives.
It is worth noting that the company had approximately 7,200 workers as of 2022. As a result of the layoff, Lucid estimates to save about $24 million to $30 million, which it plans to allocate in the preparations for its second model’s launch.
The CEO also noted that employees would receive messages from the company in the following three days.
The announcement caused Lucid’s stock to drop 7.25% on Tuesday, per The Wall Street Journal.
See Also:
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- Lucid Motors starts European deliveries of Lucid Air Dream Edition
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- Lucid Motors offers $18,000 employee discounts for Lucid Air
- Minister says Saudi Arabia will manufacture and export over 150,000 electric cars through Lucid Motors in 2026
Reuters also claims that EV companies in the US are cutting costs as they prepare for an impending recession and hefty interest rate increases by central banks.
Furthermore, industry experts explain that price cuts employed by significant automakers like Tesla and the advent of more affordable EV models from legacy automakers have reduced demand for new cars from startups like Lucid and Rivian.
