1,300 employees of Lucid Motors will be informed of their job losses by the end of this week.
The manufacturer of the Air luxury car announced a production prediction for 2023 last month that was significantly below analyst expectations and revealed a significant decline in orders during the fourth quarter.
Startups like Lucid and Rivian are facing significant difficulties as a result of Tesla’s aggressive price reductions and the introduction of more inexpensive EVs by established automakers.
In its filing, Lucid estimated that the layoffs would cost the business between $24 million and $30 million. This amount would go toward severance payments, employer-provided health insurance, and stock-based compensation for the impacted employees.
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The business anticipates having finished the reorganization strategy in large part by the end of the second quarter.
CEO and CTO Peter Rawlinson said in an email to workers that the restructuring is the result of its “evolving business needs and productivity improvements.” He said the move is aligned with a cost-reduction announcement made in late February. While the company has reduced costs, it was not enough to avoid layoffs, according to the email.
“Consequently, we’ve made the painful but necessary decision to let some of our talented team members go,” Rawlinson wrote, adding that impacted employees will be offered a severance package that includes access to career resources, Lucid-paid healthcare coverage continuation and acceleration of equity.
“We are also taking continued steps to manage our costs by reviewing all non-critical spending at this time,” he wrote.