Lucid Motors, a California-based electric vehicle (EV) maker, has announced that it is laying off approximately 1,300 employees and contractors, which constitutes about 18% of its workforce. This comes as part of the company’s restructuring plan to reduce operating expenses.
The job cuts will affect nearly every division in the US, including some executive positions. Lucid aims to complete the layoffs by the end of Q2.
The cost of the layoffs will range from $24 million to $30 million, which will be spent on severance payments, company-paid health insurance, and stock-based compensation for affected workers. Impacted employees will be offered a severance package that includes access to career resources, continuation of Lucid-paid healthcare coverage, and acceleration of equity.
In a memo, CEO Peter Rawlinson informed employees that the layoffs are due to evolving business needs and productivity improvements. Despite implementing cost-cutting measures and reviewing non-critical spending after announcing its 2022 earnings results, those measures were not enough to achieve its objectives.
Despite the layoffs and cost-cutting measures, Lucid still intends to expand globally and release new models, including the three-row Gravity electric SUV in 2024.
Lucid experienced a sharp increase in revenue year-over-year but still fell short of analyst forecasts. The production goal for 2023 is much lower than the 21,000 units experts had expected. Lucid – along with other EV startups such as Rivian – is being affected by price cuts by Tesla and the availability of affordable EVs from traditional automakers, leading to less demand for their vehicles.
Despite this, JD Power predicts that by the end of 2023, around half of new-car buyers in the US may have an EV option available to them at a price point they can afford and a size they want, due to falling EV prices and government incentives.
The layoffs are part of the company’s broader restructuring plan designed to position itself as more resilient and agile while strengthening it for the long-term. This is not the first time that Lucid Motors has amended its production goals – in August 2021, the company lowered its annual production guidance to six to seven thousand vehicles for 2022, while in February 2022, they adjusted their production goal to 12,000 to 14,000 vehicles.
In conclusion, Lucid Motors’ decision to lay off a significant portion of its workforce is a painful but necessary move as it continues to tighten its belt amid growing competition from traditional automakers and aggressive pricing by Tesla. However, Lucid’s commitment to expand globally and release new models shows that it wants to remain a key player in the growing EV market.
Image Source: Wikimedia Commons
Belfast City Marathon 2023 Road Closures ConfirmedBelfast City Marathon organizers have confirmed the details of…
Adysen Koenigsknecht's Remarkable Journey to the Boston MarathonAdysen Koenigsknecht has come a long way since…
Anderson's Passion for Track and Field Leads to Boston Marathon RoleESPN's SportsCenter anchor John Anderson…
Seth Rollins, WWE superstar and former Universal Champion, has appealed to his fans for support…
The 2023 Boston Marathon is gearing up to be a historic event, as it will…
A Heartwarming Tribute to Spencer and PennyA group of golden retrievers participated in a touching…