On March 27, Lucid Group, Inc. announced plans to lay off 18% of its workforce---about 1,300 employees, including executive positions. The news comes after Lucid released its fourth quarter and full year (FY) 2022 financial results in February.
Lucid plans to lay off workers to cut costs while initiating its restructuring plans. According to a regulatory filing, the layoffs will be completed by Q2 2023. The EV company expects to incur between $24 million and $30 million in expenses, mostly for severance payments, employee benefits and stock-based compensation.
Lucid CEO and CTO Peter Rawlinson explained in an email to workers the company has reduced costs. Unfortunately, it did not reduce costs enough to avoid layoffs. Rawlinson added Lucid’s restructuring plan results from its “evolving business needs and productivity improvements.”
“Consequently, we’ve made the painful but necessary decision to let some of our talented members go,” Rawlinson wrote in his email. “We are also taking continued steps to manage our costs by reviewing all non-critical spending at this time.”
In its fourth quarter and FY 2022 financial results, Lucid set its 2023 annual production guidance between 10,000 and 14,000 vehicles.
In 2022, Lucid Motors produced approximately 7,180 vehicles, topping its forecast of 6,000 to 7,000. However, analysts pointed out Lucid’s production forecasts for 2022 were slashed multiple times. Lucid was initially expected to produce 20,000 vehicles last year.
Lucid stock slid after the release of its Q4 and FY 2022 report when it revealed a significant revenue miss in the fourth quarter. The company delivered 1,932 vehicles in Q4 2022, missing analysts’ estimates of 2,813 cars.
Many analysts believe Lucid’s performance is due to waning demand for luxury EVs. EV manufacturers are leaning towards producing more affordable all-electric cars. Volkswagen announced the launch of the ID.2, and Tesla is expected to unveil its $25,000 EV soon.