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The Lucid CEO said the company remains committed to expanding globally despite cutting headcounts.
American EV maker Lucid Group Inc (NASDAQ: LCID) has revealed plans to reduce headcounts, dismissing about 18% of its workforce. The company announced the job cut in an SEC filing on the 27th of March. According to the document, Lucid is reducing workers as part of a larger restructuring plan to reduce expenses. Employees’ dismissal is no longer news in the markets. Over the past years, many companies across different sectors have had to fire some staff amid economic uncertainties. Like Lucid, a lot of the companies referred to “reducing expenses or costs” as the reason for reducing their headcounts. While some conducted a one-off firing, others have embarked on multiple layoffs.
Lucid Files to Lower Headcounts
In the SEC filing, Lucid said it is reducing headcounts to reduce costs and scale up the production of its Air luxury sedan. The company specified that the decision is “in response to evolving business needs and productivity improvements.” The layoff will result in about $24 million to $30 million in charges. The luxury vehicle manufacturer noted that the charges would cover severance payments, employee transition, benefits, and stock-based compensation. According to the company, charges of nearly $22 million to $28 million will be recognized in Q1 2023. It added that most of the charges are expected to be paid by the end of the second quarter. Speaking further on lowering headcounts, Lucid explained:
“The estimates of the charges and expenditures that the Company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual amounts may differ materially from estimates. The Company may also incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Plan.”
Lucid CEO and Chief Technology Officer Peter Rawlinson emailed the company’s employees to inform them of the decision to cut headcounts. He revealed that the decision will affect both employees and contractors. The CEO mentioned that impacted workers would receive severance packages, continued healthcare coverage, and more. The company plans to contact the layoff victims over three days before March ends. In addition, Rawlinson said the US workforce would experience resizing in almost every organization and level, including executives.
Moving forward, the Lucid CEO said the company remains committed to expanding globally despite cutting headcounts. He expressed his confidence in the company’s advanced technology, operational infrastructure, and track record of tenacity.
At a current trading price of $7.57 per share, LCID closed down over 7% following news of its layoff.