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Published on May 30, 2024
Bay Area's Lucid Motors to Lay Off 6% of Workforce Amid Cost-Cutting MeasuresSource: Google Street View

In a clear indication that electric vehicle manufacturers are continuing to feel the heat from ongoing financial pressures, Bay Area-based Lucid Motors has announced plans to lay off approximately 400 employees, around 6% of its workforce. The layoffs, said to be completed by the end of the third quarter, come amid efforts to reduce operating costs and improve productivity within the company. According to a Securities and Exchange Commission filing by Lucid Group on May 24, the estimated financial impact of these layoffs will be between $21 million and $25 million, primarily stemming from severance and other related expenditures.

Despite recently raising $1 billion in additional funding through a stock sale to a subsidiary of Saudi Arabia's sovereign wealth fund, Lucid Motors still faces the challenge of bringing high-cost electric luxury vehicles to a competitive market. The gravity of this move was emphasized by CEO Peter Rawlinson in a message attached to the SEC filling, reviewed by the San Francisco Chronicle, where he acknowledged the harsh reality that the layoffs would affect "our talented team members" across all levels, "including leadership and mid-level management." He added, however, that the severance and health benefits, along with assistance in finding new jobs, would be provided to the affected employees.

Lucid's latest electric vehicle, the Gravity SUV, is expected to start production by the end of 2024. Rawlinson noted in his email that despite the Gravity SUV's anticipated entry into the market, Lucid has yet to see any revenue from the program. As reported by SFGATE, he stressed, "We are optimizing our resources in a way we believe will best position the company for future success and growth opportunities as we focus on achieving our ambitious goals."

The tech-heavy Bay Area has become a breeding ground for startup electric vehicle manufacturers like Lucid, which strives to make a name for itself in a landscape dominated by established giants like Tesla. As seen in the aftermath of the layoffs, the large infusion of cash from Lucid's main investor, which kept the company afloat through turbulent financial times, did not prevent the restructuring that led to employees receiving pink slips. Rawlinson asked for empathy and contention in support of colleagues now searching for new jobs, indicating the somber tone within the company during this transitional period.