American electric vehicle start-up Lucid Group (LCID) is cutting 18% of its workforce, or 1,300 employees, as it tries to reduce costs amid waning demand for its luxury sedan.
Lucid said it will incur one-time charges of $24 million U.S. to $30 million U.S. related to the job cuts.
Lucid chief executive officer (CEO) Peter Rawlinson told employees that the job cuts will be company-wide and include executives.
Severance packages are expected to include continued healthcare coverage paid by Lucid, as well as an acceleration of equity vesting in the automaker.
Lucid ended last year with $4.4 billion U.S. of cash on hand, enough to last until the first quarter of 2024, the company said.
However, demand for Lucid’s high-priced Air electric sedan, which costs more than $100,000 U.S., has fallen short of the company’s internal projections.
Lucid said that it had more than 28,000 reservations for the Air as of February 21 this year. But it also said that it plans to build only about 10,000 of the vehicles in 2023, far less than the 27,000 that analysts who cover the company had expected.
With Lucid’s manufacturing plant equipped to build 34,000 vehicles per year, the company has warned of continuing losses. It also hasn’t announced a date for its first-quarter earnings.
Lucid’s stock has fallen 72% over the last 12 months and now trades at $7.55 U.S. per share.
Tech Insider
