U.S. electric car startup Lucid told employees at an all-staff meeting Tuesday that it plans to lay off about 1,300 workers, or 18 percent of its workforce, in the coming months, according to BusinessInsider, a person familiar with the matter said.
According to sources and an internal memo sent after the meeting, Lucid CEO Peter Rawlinson told employees that the company will lay off about 18 percent of its workforce and that Lucid will communicate details of the layoffs, which will affect every organization and level of the company, including executives, within the next three days.
According to an email from the company’s CEO Peter Rawlinson, the layoffs will affect “virtually all departments and levels, including executives.” Rawlinson said employees will learn more about the layoffs over the next three days, while regulatory filings show the company Rawlinson said employees will learn more about the layoffs in the next three days, while regulatory filings indicate the company plans to complete the restructuring “by the end of the second quarter of 2023. Affected employees are expected to receive severance packages, including access to career resources, health insurance continuation and accelerated equity distributions, according to the emails. And regulatory filings show that the company plans to spend about $24 million (currently about 165 million yuan) to $30 million (currently about 207 million yuan) on “costs related to employee transfers, severance, employee benefits and stock-based compensation.
For those who have been following Lucid, the layoffs come as no surprise, as Rawlinson said the cuts are “consistent with the cost discipline we announced in late February when we reported earnings,” and when the company announced that it had burned through about $2.6 billion during fiscal 2022.
The company has also been struggling to produce and deliver cars, reporting in February that it had more than 28,000 reservations but saying it would only be able to produce 10,000 to 14,000 cars during 2023. Even so, that would be a big improvement, as the company produced only 7,180 cars in 2022 and delivered about 4,300 of them.
The company also took another hit this week, announcing a recall of about 600 vehicles to fix a problem that could cause the cars to lose power.
Lucid isn’t the only automaker making massive layoffs. In the past year, Ford laid off about 3,000 workers, General Motors offered buyout plans to many employees as part of a $2 billion budget cut, Stellantis announced plans to close a plant and Tesla also made a round of layoffs. Other startups are also struggling, with Arrival laying off half its workforce and Rivian cutting 6 percent of its staff — twice.