Lucid Group has announced plans to cut its United States workforce by 6%, affecting approximately 400 employees, as the electric vehicle (EV) manufacturer responds to a challenging market with slower growth. The company’s decision reflects a broader trend in the industry, with automakers seeking to streamline operations amid economic headwinds such as inflation and high interest rates, which have dampened demand for higher-priced EVs in favor of more affordable hybrid alternatives.
CEO Peter Rawlinson communicated the layoffs to employees, stating that they would impact staff at all levels, including leadership and mid-level management, but assured that the hourly manufacturing and logistics workforce would not be affected. Lucid, which employed around 6,500 full-time workers globally as of December last year, anticipates incurring charges of approximately $21 million to $25 million related to the workforce reduction, with plans to complete the process by the end of the third quarter of 2024.
This move by Lucid follows similar actions by other players in the EV sector. Rivian, for instance, underwent two rounds of layoffs this year, including a 1% reduction in its workforce last month aimed at improving margins. Tesla, a key player in the industry, also announced plans last month to lay off over 10% of its global workforce.
Despite the challenges, Lucid remains focused on its growth plans. The company recently forecasted higher annual capital expenditure as it expands production capacity at its Arizona factory and constructs a new facility in Saudi Arabia. With backing from Saudi Arabia’s Public Investment Fund, Lucid is poised to commence production of a more affordable mid-size car by late 2026, in addition to launching its Gravity SUV this year, in a bid to attract a broader customer base.
