Tuesday, July 23, 2024

Electric vehicle startup Lucid will cut approximately 18% of its workforce

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Electric car maker Lucid Group said Tuesday it will lay off about 18% of its workforce, or about 1,300 employees, to cut costs as part of a restructuring plan.

The luxury sedan maker last month projected 2023 production that fell far short of analysts’ expectations and reported a significant drop in orders during the fourth quarter.

The company plans to communicate with all of its employees within the next three days about the plan, CEO Peter Rawlinson said in a letter, adding that its U.S. workforce will see cuts at nearly every organization and level, including executives.

Lucid, which had about 7,200 employees at the end of last year, will incur between $24 million and $30 million in related fees. The company expects to substantially complete the restructuring plan by the end of the second quarter.

“We are also taking ongoing steps to manage our costs by reviewing all non-critical expenses at this time,” Rawlinson said.

Companies in the United States are reining in expenses as they brace for a looming recession amid big interest rate increases by central banks.

Industry experts say price cuts by industry leader Tesla Inc and the availability of cheaper EV models from traditional automakers have weighed on demand for new cars from startups such as Lucid and Rivian Automotive Inc.

Last month, Rivian said it would shed 6% of its workforce in an effort to cut costs.

Lucid shares closed down about 7% in regular trading.

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