U.S. automaker of luxury all-electric Air sedan Lucid Motors (LCID) will lay off 18% of its workforce.
The move was part of a restructuring move, the Newark, California-based company said in a regulatory filing.
This round of job cuts is expected to affect 1,300 employees and is set to be complete by the end of the second quarter.
The restructuring plan is expected to cost Lucid $24-30 million including in severance pay, employee benefits, and stock-based compensation. The layoffs will affect all levels of the organization.
In an email to the workers, CEO, and CTO Peter Rawlinson said the restructuring is in response to “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, a TechCrunch report said.
“Consequently, we’ve made the painful but necessary decision to let some of our talented team members go,” Rawlinson wrote.
The staff 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.”
Rawlinson said the company aims to be “more resilient and agile.”
Lucid expects the launch of its Gravity SUV in 2024 on track despite the layoffs.
Lucid’s fourth-quarter and full-year 2022 earnings missed Wall Street expectations forcing the company to cut its 2023 annual production target to 10,000-14,000, about half of the 20,000-22,000 projected deliveries for the year.
Lucid Motors had reduced its annual production guidance in half due to what Rawlinson described as “extraordinary supply chain and logistics challenges.” The company later further lowered its production guidance from 12,000 to 14,000 vehicles to 6,000 to 7,000 vehicles for 2022, a quarter of the 20,000 luxury Air sedans the company planned to produce last year.