Lucid to lay off 1,300 employees in restructuring
Lucid Group, the U.S. automaker that produces the luxury all-electric Air sedan, is cutting its workforce by 18% as part of a restructuring, the company disclosed in a regulatory filing.
The layoffs, which will affect 1,300 employees, will be completed by the end of the second quarter. Lucid expects to incur about $24 million to $30 million in charges connected with its restructuring plan, namely due to severance payments, employee benefits and stock-based compensation. The layoffs will be across the organization and will include executive positions.
CEO and CTO Peter Rawlinson said in an email to workers that the restructuring is the result of its "evolving business needs and productivity improvements." He said the move is aligned with a cost-reduction announcement made in late February. While the company has reduced costs, it was not enough to avoid layoffs, according to the email.
"Consequently, we've made the painful but necessary decision to let some of our talented team members go," Rawlinson wrote, adding that impacted employees will be offered a severance package that includes access to career resources, Lucid-paid healthcare coverage continuation and acceleration of equity.
"We are also taking continued steps to manage our costs by reviewing all non-critical spending at this time," he wrote.
Rawlinson said the decisions are designed to position the company to be "more resilient and agile" and strengthen the company for the long-term. He also said that Lucid still intends to launch the Gravity SUV in 2024.
Last month, 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, roughly half of the 20,000 to 22,000 deliveries analysts had expected for the year.
That was the third time in a year that the company lowered its production goals. In August, Lucid Motors slashed its annual production guidance in half due to what Rawlinson described as “extraordinary supply chain and logistics challenges.” Lucid lowered its production guidance from 12,000 to 14,000 vehicles to 6,000 to 7,000 vehicles for 2022. That’s just a quarter of the 20,000 luxury Air sedans the company initially planned to produce in 2022. In February 2022, Lucid adjusted that loftier goal down to 12,000 to 14,000 vehicles.