Lucid Group (LCID) is cutting 400 jobs, or about 6% of its workforce, as part of a restructuring, according to a filing. The move comes a little more than a year after the EV maker cut 1,300 positions in a bid to cut costs. Lucid is expected to release its Gravity SUV later this year.
In the video above, Yahoo Finance’s Brad Smith and Seana Smith discuss the challenges Lucid is facing.
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This post was written by Stephanie Mikulich.
Video Transcript
Lucid, announcing a restructuring plan to optimise the company’s operating expenses.
The company is looking to trim its workforce by approximately 400 employees.
Shares right now are up by about 1.1%.
But you you hate to see pops that are really for this company, especially if you look at the broader term here.
Yeah, past two days.
But if we tossed up a year to date chart for Lucid, it would be a much different picture here and even over the past 52 week slippage.
Year to date down 35% in here.
And it comes as the time where they’re also in the broader kind of EV demand landscape.
They’re on the ultra luxury side of that, too, here and so trying to woo some of the big money out there to buy into that luxury experience could be even tougher.
Oh, yeah, and you’ve got more competition from the likes of Mercedes and some of the EV offerings that they’re putting out there, uh, as well is still Tesla, too?
Yeah, exactly.
And this is just another by product or another effect here of the slowdown that we have seen in the adoption of the growth rate for EVs and, as a result, a number of these companies facing these tough decisions.
And it’s also important to point out that Lucid is far from alone within having to announce layoffs here over the last couple quarters.
Even when you take into account what has happened in the last couple of months, you have Tesla announcing layoffs that it would cut about 10% of its workforce.
Also, Vivian having multiple layoffs this year.
So again, lucid the latest to join that.
And why is it happening?
It’s happening because of that uptake rate that you have been talking about the fact that consumers are feeling pressure.
Many consumers aren’t out there making those bigger ticket purchases right now, because rates are high and likely to stay high for longer here when you take a look at the recent commentary that we’re getting out from Fed officials here this week.
So all that taken into context, it’s leading to weakening and here in the US for a lot of these EV, uh, vehicles and as a result of these EV manufacturers having to make adjustments to their business and unfortunately having to lay off hundreds of workers as a result here in an effort to cut costs.
But when it comes to this restructuring effort, al L it, saying that it’s going to incur charges of about 21 to 25 million from this restructuring plan, the bulk of this is going to be recognised here in the current quarter.