In an effort to reduce running costs and preserve cash before launching a second model next year, EV startup Lucid plans to lay off roughly 1,300 employees, or 18% of its workforce. By the end of Q2, the California-based company anticipates having concluded reducing its headcount.
In an email written by Chief Executive Peter Rawlinson to employees, “the cuts would occur across the company’s U.S. operations,” which include executives. Due to the cuts, Lucid expects to spend between $24 million to $30 million because of the staff reductions. Rawling adds, “over the next three days, these messages are anticipated to be distributed to the appropriate employees.”
Meanwhile, as demand for new cars and trucks softens following rising interest rates and increasing economic concerns, Lucid is the largest automaker to make steep cuts to its workforce.
Whereas, Ford, General Motors, and Rivian, a rival EV startup, have all recently reduced staff. To ensure Rivian had enough money to support operations for the next few years, it conducted two rounds of layoffs and cut back on or delayed some projects.
When Lucid announced its full-year results, it highlighted a number of cost-saving initiatives, including reducing parts and shipping expenses as well as delaying some expenditures for the growth of its Arizona factory. The Gravity, an electric SUV that will be produced at Lucid’s factory in Casa Grande, Arizona, will be the company’s second model, and it will go on sale next year.
Ultimately, at the end of 2022, Lucid had $1.74 billion in cash and cash equivalents, down from $3.86 billion at the end of September. In December, the business raised $1.5 billion from investors, which mostly came from Saudi Arabia’s Public Investment Fund, the company’s primary shareholder.
According to the automaker, it has enough funds on hand to cover expenses for the first quarter of 2024.
