Lucid (LCID) cuts US workforce by 6% ahead of Gravity EV launch

Lucid (LCID) is the latest EV maker to reveal job cuts to reduce costs. As part of a new restructuring plan, Lucid plans to reduce its US workforce by 6%, or about 400 employees.

Lucid cuts workforce amid new restructuring plan

In an 8-K filing Friday, Lucid announced a new restructuring plan, which includes cutting around 400 jobs.

CEO Peter Rawlinson emailed employees on May 24, 2024, explaining the new job cuts amid plans to restructure its US and contract workforce. Rawlinson said the reduction will “not impact our hourly manufacturing and logistics workforce.”

However, it will impact “employees at all levels, including leadership and mid-level management.”

The job cuts amount to about 6% of Lucid’s US workforce. Lucid expects to complete the new plan by the end of Q3 2024.

Under the new plan, which mainly consists of severance payments, employee benefits, and stock-based compensation, Lucid expects around $21 to $25 million in charges. About $19 to $23 million will be primarily reported in Q2, with most of the charges expected to be paid by the end of Q3 2024.

Lucid expects most of the expenses to be cash expenditures. Meanwhile, changes to stock-based compensation are “not expected to be material,” according to Lucid.

Rawlinson explained that “letting go of our talented team members is difficult and a decision we did not take lightly” and thanked everyone who had helped the company grow.

The news comes ahead of what could be Lucid’s most important model yet. Lucid is set to launch production of its first electric SUV, the Gravity, by the end of the year. Lucid’s CEO said, “I’m confident Lucid will deliver the world’s best SUV and dramatically expand our total addressable market.”

Since the program is still losing money, “we must remain vigilant about costs.” He stressed, “Today’s decision is about positioning us for future growth.”

Lucid set a new delivery record in the first quarter and is seeing the momentum continue into Q2. Rawlinson boasted, “I want to stress that the future is bright at Lucid.”

The news comes after several rivals, including Rivian, reduced their workforces in an effort to increase profits.

Lucid’s stock is down around 4% following the news. LCID shares are now down over 65% over the past 12 months.

Electrek’s Take

Lucid generated $172.7 million in revenue in Q1, up from $149.4 million a year ago. Meanwhile, the EV maker reduced operational losses ($729.9 million vs $772.2 million) as it looks toward its next growth stage.

The Gravity is expected to open up new markets for Lucid, significantly expanding its addressable market.

With another $1 billion investment from Saudi Arabia’s Public Investment Fund (PIF), Lucid ended the quarter with over $5 billion in liquidity.

Lucid expects to build around 9,000 vehicles this year, nearly the same as the 8,428 units made in 2023. Following the Gravity, Lucid plans to launch a new mid-size electric SUV that will expand its market drastically.