Lucid Is Laying Off 1,300 Employees
Lucid's CEO Peter Rawlinson has announced layoffs for the start-up EV manufacturer that will see roughly 18% of the company's workforce head out the door.
Aimed at lowering costs amid economically uncertain times and waning demand for the most expensive variants of the brand's flagship Lucid Air sedan, Rawlinson says that the layoffs align with cost discipline guidelines announced during February's earnings call. All non-critical spending is under review, while Lucid has enough cash on hand to operate until early 2024.
What Happens Next?
Who goes and who stays will be made clear to Lucid employees over the next couple of days, with departures from nearly every level of the company's structure including executives. Rawlinson promised that all employees would be made aware of their status this week.
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Lucid is promising its full support to laid off employees, with severance packages including access to career resources, continuation of Lucid-funded healthcare programs and acceleration of equity. The company expects to spend between $24 million and $30 million on severance payments, benefits, stock-based compensations and other restructuring costs.
Rawlinson referred to the decision to go ahead with layoffs as positioning Lucid to be more resilient and agile, strengthening the company for the road ahead.
"Our mission remains unchanged. We are committed to a more innovative and environmentally sustainable future – designing, building, and delivering the best EVs on the market as we expand globally and develop more exceptional vehicles such as the Gravity SUV, which we plan to launch in 2024. I am confident that we have the most advanced technology, we have the right operational infrastructure and know-how to deliver, and we have a track record of tenacity that will make us stronger."
The layoffs announcement comes on the heels of another piece of troublesome news for Lucid, namely that it's recalling 637 Lucid Airs to fix a potential issue with contactor switches inside their electric motors. These switches close when the vehicle is switched on to supply power to the motors and open when the car is shut down. The problem arose from a number of these contactors whose opening springs overcame the magnetic force holding them in the closed position causing a sudden loss of power to the motors.
Replacement contactors have been made with stronger magnetic forces to hold them in the closed position as designed. Lucid first investigated the issue in May 2022 before pushing out an over-the-air update which allowed for remote monitoring of the issue.
Images by Lucid Motors licensed by CC BY 4.0.
James Walker is an Automotive Journalist at Torque News focusing on Lucid Motors. If it's got wheels he's interested, and he's looking forward to seeing what kind of cars the EV revolution brings us. Whether it's fast, slow, new, or old, James wants to have a look around it and share it in print and on video, ideally with some twisty roads involved. You can connect with James on Twitter, Instagram, and LinkedIn.