Lucid Motors to Cut 400 Jobs in Workforce Restructuring

Lucid Group is laying off 6% of its workforce, about 400 employees, as part of a restructuring plan, impacting short-term stock performance.

Lucid Motors is undergoing a significant workforce restructuring, announcing the layoff of about 400 employees, which constitutes roughly 6% of its total workforce. This decision is framed as a strategic move ahead of the launch of its first electric SUV expected later this year. The restructuring process is targeted to be completed by the end of the third quarter and is estimated to incur costs between $21 million and $25 million. This action follows a previous reduction of 1,300 jobs over a year ago, underscoring the challenges faced by Lucid Motors in a cooling electric vehicle market that has seen widespread job cuts across the industry.

The cuts across Lucid's full-time and contract workforce, including leadership and mid-level management positions, are part of an effort to optimize resources and position the company for future success. However, hourly manufacturing and logistics employees will not be affected, indicating Lucid's continued investment in production capabilities. CEO Peter Rawlinson emphasized the necessity of vigilance regarding costs while pursuing ambitious goals, including delivering what he anticipates will be the world's best SUV.

Lucid's decision mirrors broader industry trends, with many electric vehicle companies in North America downsizing this year after the explosive growth experienced in previous years has begun to stabilize. Lucid Motors, in particular, has faced challenges finding buyers for its Air sedan, although it set a delivery record in the first quarter of 2024. The company secured an additional $1 billion in funding from its majority owner, Saudi Arabia’s sovereign wealth fund, in March, reflecting continued investor confidence despite the current restructuring.

Amidst these operational challenges, the electric vehicle sector is observing massive layoffs, including significant job cuts by industry leader Tesla. These developments point to a highly competitive and rapidly evolving market landscape that demands strategic agility and cost optimization from all players, including Lucid Motors. As Lucid prepares for the critical launch of its electric SUV, the company’s ability to navigate current economic pressures while maintaining its innovation edge will be crucial to its long-term success and expansion into new market segments.

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