- Lucid Motors plans to lay off approximately 1,300 workers as part of a restructuring plan, according to a March 27 SEC filing.
- Reductions will affect every level of the company, CEO and CTO Peter Rawlinson said in a March 28 email to employees. Of the layoffs, 968 will consist of employees at Lucid’s manufacturing facility in Casa Grande, Arizona, and 133 from its headquarters in Newark, California, according to state WARN filings.
- The layoffs follow Rawlinson’s announcement on a late February earnings call that the company would be taking steps to reduce operating and vehicle costs.
While the EV manufacturer has been reviewing and implementing several other options to optimize its cost structure, it wasn’t enough to achieve its production goals, Rawlinson told employees in his email.
Lucid Motors expects to implement layoffs by the end of Q2 and pay $24 million to $30 million in severance packages, employee transition fees, benefits and stock-based compensation, according to the SEC filing.
“I know this is not easy as these actions create uncertainty,” Rawlinson said. “This week and the weeks ahead will be about processing change as we show empathy for colleagues who are departing and as we come together on our path forward. These decisions are designed to position us to be more resilient and agile, thereby strengthening the company for the long-term.”
While Lucid Motors is gearing up to expand its service and delivery footprint throughout the U.S., Europe and the Middle East, they’re simultaneously taking a “vigorous and comprehensive look at reducing costs,” CFO Sherry House told analysts during the February earnings call.
The company has been holding daily cost improvement meetings in various manufacturing, engineering and supply chain areas, which led to reduced battery raw material input costs last year, House said.
“As we are sitting here in February, we already have identified cost opportunities at a similar level to last year that we expect to implement by the end of this year,” House said. “And we are surfacing more innovative ideas in cross-functional internal meetings and value engineering workshops with our supply base.”
To help cut costs, the company has already sourced 70% of its Gravity SUV’s components, which is anticipated to begin production in 2024. It’s also opted to use ocean shipping instead of air transit to import needed materials for the SUV units. Lucid Motors plans to bring its logistics operations and staffing in-house at its Arizona site to further reduce expenses
"As we look into 2023, we'll continue to focus on strong capital discipline, leaving no stone unturned for every cost optimization or elimination opportunity," House said.