Luxury electric vehicle maker, Lucid Group Inc (LCID.O), is reportedly planning to lay off approximately 18% of its workforce, according to sources familiar with the matter and an internal memo cited by Insider on Tuesday. With around 7,200 employees at the end of last year, the company is expected to communicate the details of the layoffs within the next three days.
Lucid, which produces the Air luxury sedan, has recently reported a major drop in orders during the fourth quarter, and forecasted 2023 production to fall well short of analysts’ expectations. This is likely due to a combination of high inflation, which is pinching consumers’ wallets, and increasing competition from both traditional automakers offering cheaper EV models, and industry leader Tesla Inc (TSLA.O), which has been cutting prices.
In response to the challenging market conditions, rival EV manufacturer Rivian Automotive Inc (RIVN.O) also announced last month that it would lay off 6% of its workforce as part of a wider cost-cutting effort.
The news comes as companies across the United States take steps to reduce costs in preparation for a potential recession, amid aggressive interest rate hikes by central banks worldwide. Lucid has not yet responded to requests for comment from Reuters regarding the reported layoffs.
