In 2021, the US company Lucid Motors, which focuses on the production of electric sedans, made its stock market debut. But the company hasn’t fared well since then, with Lucid in the red in 2022. Therefore, the company has now announced a major restructuring that includes a massive wave of layoffs. Golem reports that 1,300 employees, about 18 percent of the workforce, will be laid off.
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Terminations within the framework of “cost discipline”
“This measure is in line with the cost discipline that we announced at the end of February when we published our results. We are also taking additional steps to control costs by currently reviewing all non-critical spend,” said Lucid CEO Peter Rawlinson. “We have evaluated and implemented various other options to optimize our cost structure, but unfortunately these measures alone will not be sufficient to achieve our goals. As such, we made the painful but necessary decision to lay off some of our talented team members,” he adds.
Around 7,200 people were employed at Lucid at the end of last year. With its restructuring plan, the company now wants to reduce its operating costs. The layoffs are expected to be completed by the end of the second quarter of 2023. There should be layoffs in all areas, including executives. According to SEC filings, Lucid is budgeting for severance and compensation costs of between $24 million and $30 million.
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Sales development at Lucid Motors actually positive
“I know this is not easy as these measures create uncertainty,” Peter Rawlinson said in an email to workers. “These decisions are intended to enable us to be more resilient and flexible, thereby strengthening the company over the long term.” For 2022, Lucid reported a loss of $1.3 billion. The sales development was actually positive, and the manufacturer was also able to slightly exceed its reduced production target.
However, the economic developments of the past year have had a severe impact on Lucid Motors. In addition, the price cuts at Tesla and the availability of affordable electric car models had a negative impact on demand. The company had to shut down production last year. In the US, Lucid also has to recall 637 copies of its luxury sedan Lucid Air. Some of the vehicles had unexpectedly shut down on the road.