Lucid Group, the American automaker that produces the luxury all-electric Air saloon, is reducing its workforce by 18% as part of a restructuring, as revealed by the company in a regulatory statement.
The layoffs, which will affect 1.300 employees, will end at the end of the second quarter. Lucid expects to incur $24-30 million in expenses related to its restructuring plan, specifically for severance pay, employee benefits and stock-based compensation. The layoffs will occur throughout the organization and will include executive positions.
CEO and CTO Peter Rawlinson said in an email to workers that the shakeup is the result of his "evolving business needs and productivity improvements." He said the move is in line with a cost reduction announcement made in late February. Although the company has reduced costs, it has not been enough to avoid layoffs, according to the email.
"Accordingly, we have made the painful but necessary decision to lay off some of our talented team members," Rawlinson wrote, adding that affected employees will be offered a severance package that includes access to career resources, continued of health coverage paid for by Lucid and equity acceleration.
"We are also taking ongoing steps to manage our costs by reviewing all non-critical expenses at this time," he wrote.
Rawlinson said the decisions are designed to position the company to be "more resilient and agile" and make the company stronger for the long term. He also said that Lucid still intends to launch the Gravity SUV in 2024.
A few months ago, Lucid reported fourth-quarter and full-year 2022 earnings that missed Wall Street expectations. The company also lowered its 2023 annual production target to 10.000 to 14.000 units, about half of the 20.000 to 22.000 deliveries analysts had expected for that year.
It is the third time in a year that the company lowers its production targets. In August, Lucid Motors halved its annual production forecasts due to what Rawlinson described as "extraordinary supply chain and logistics challenges." Lucid lowered its production forecasts from 12.000 to 14.000 vehicles to 6.000 to 7.000 vehicles by 2022. That's just a quarter of the 20.000 Air luxury sedans the company initially planned to produce in 2022. In February 2022, Lucid adjusted that higher target of 12.000 or 14.000 vehicles.
