Lucid Motors is set to lay off approximately 400 employees, representing about 6% of its workforce, as part of a strategic restructuring effort in preparation for the release of its first electric SUV later this year. The company disclosed this development in a regulatory filing on Friday morning, indicating that the restructuring should be completed by the end of the third quarter at an estimated cost of $21 million to $25 million.
This recent round of layoffs comes slightly over a year after Lucid Motors reduced its workforce by 1,300 jobs. CEO Peter Rawlinson addressed the company in an email, expressing his confidence in Lucid’s ability to deliver a top-tier SUV and significantly expand its market reach. However, he acknowledged the current lack of revenue from the upcoming SUV program and emphasized the need to remain cost-conscious. Rawlinson stated that the company is optimizing its resources to better position itself for future success and growth, focusing on achieving its ambitious goals.
The job cuts will affect both full-time and contract employees, including leadership and mid-level management positions. However, hourly manufacturing and logistics employees will not be impacted by these layoffs.
Industry-Wide Challenges
Lucid’s restructuring occurs amidst significant job cuts across the electric vehicle (EV) sector in North America, with major players like Tesla also reducing their workforce in recent months. This trend reflects a cooling period following the rapid growth experienced by the industry over the past few years.
Lucid Motors has faced particular challenges in securing buyers for its existing model, the Air sedan. Despite this, the company achieved a delivery record in the first quarter of 2024. In March, Lucid raised an additional $1 billion from its majority owner, Saudi Arabia’s sovereign wealth fund, to bolster its financial position and support its ongoing initiatives.
Looking Ahead
As Lucid Motors prepares for the crucial launch of its first electric SUV, the company’s restructuring efforts aim to streamline operations and enhance its ability to meet future market demands. The upcoming SUV is expected to play a pivotal role in expanding Lucid’s product lineup and driving revenue growth. By strategically reducing its workforce and optimizing resources, Lucid aims to navigate the current market challenges and position itself for long-term success in the competitive EV market.