EV maker Lucid to slash 1300 jobs for restructuring in a bid to reduce costs

Lucid, the well-known U.S.-based electric car manufacturer, has reportedly planned to slash around 1300 jobs, nearly 18% of its workforce as a part of a broader restructuring process to cut costs as it works on increasing the output of its Air luxury sedan.

Lucid stated that it will be incurring one-time fees that range from $24 million to $30 million as a result of the staff reductions, with the majority of that amount acknowledged in the initial quarter of 2023.

As per reports, Insider was the first to report on the employment cuts on Tuesday. Lucid’s shares closed at more than 7% on Tuesday.

CEO Peter Rawlinson wrote in a letter to staff members that the layoffs will be impacting nearly every team and level, involving executives, while adding that the affected workers will be informed over the following three days. Rawlinson wrote that severance packages will consist of ongoing medical insurance paid for by Lucid in addition to advancement of equity vesting.

As per CFO Sherry House, Lucid had approximately $4.4 billion in the capital on hand at the end of 2022, which would have been sufficient to last until Q1 of 2024. The demand for overpriced Air, however, does not appear to have met Lucid's internal objectives, while the company may be having difficulty converting early bookings into sold sales.

According to Lucid, it had more than 28,000 bookings for the Air as of its most current report on February 21. However, it also revealed that, in contrast to the 27,000 cars that Wall Street analysts had estimated, it would only be manufacturing 10,000 to 14,000 vehicles in 2023.

Regardless of the factory's current capacity to make more than 34,000 vehicles annually, Lucid has been warned about additional losses.

Apparently, the first-quarter revenue report for Lucid has not yet been given a publication date.

Source credit: https://www.cnbc.com/2023/03/28/lucid-to-cut-1300-workers.html