EV Startup Lucid Plans To Reduce Its Workforce By About 18%

The manufacturer of electric vehicles, Lucid Group Inc., announced on Tuesday that it would restructure its business and eliminate 1,300 jobs, or about 18% of its workforce.

The manufacturer of the Air luxury sedan announced a production forecast for 2023 last month that was significantly below analyst expectations and revealed a significant decline in orders during the fourth quarter.

CEO Peter Rawlinson stated in a letter that the company intends to inform all of its employees about the plan over the course of the next three days. He also added that its U.S. workforce will experience reductions in nearly every organization and level, including executives.

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The associated costs for Lucid, which had about 7,200 employees at the end of last year, will range from $24 million to $30 million. By the end of the second quarter, the company anticipates having completed the restructuring plan in large part.

We are currently reviewing all non-critical spending as part of our ongoing efforts to manage our costs, Rawlinson added.

As a result of aggressive interest rate increases by central banks, businesses in the United States are cutting costs as they prepare for an impending recession.

According to industry experts, demand for new cars from startups like Lucid and Rivian Automotive Inc. has been affected by price reductions by market leader Tesla Inc. and the availability of less expensive EV models from conventional automakers.

In an effort to reduce costs, Rivian announced last month that it would fire 6% of its workforce.

Shares of Lucid decreased about 7% at the close of regular trading.