Lucid cuts 400 jobs, or around 6% of the workforce

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 just over a year after the electric vehicle maker cut 1,300 jobs 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 facing Lucid.

For more expert insights and the latest market action, click here to watch this full episode of Morning Brief.

This article was written by Stéphanie Mikulich.

Video transcription

Lucid, announcing a restructuring plan to optimize the company’s operational expenses.

The company is looking to reduce its workforce by about 400 employees.

Shares are currently up about 1.1%.

But you hate to see pops that are really for this company, especially if you look at the broader term here.

Yeah, for two days.

But if we were to plot a cumulative chart for Lucid, the situation would be much different here and even over the past 52 weeks of sliding.

Year to date, down 35% here.

And it comes at a time when they also fit into the broader landscape of electric vehicle demand.

They’re also on the ultra-luxury side here, and so trying to woo some of the big bucks to buy that luxury experience might be even more difficult.

Oh, yeah, and you have more competition from Mercedes and some of the electric vehicle offerings that they have, um, and Tesla is still there too?

Yes exactly.

And that’s just another byproduct or another effect of the slowdown that we’ve seen in the adoption of electric vehicle growth rate and as a result, a number of these companies are facing these difficult decisions .

And it’s also important to point out that Lucid is far from alone in having to announce layoffs over the past two quarters.

Even taking into account what has happened over the past two months, Tesla has announced layoffs and will cut approximately 10% of its workforce.

Additionally, Vivian has experienced several layoffs this year.

Again, be the last to join this.

And why does this happen?

It’s because of this adoption rate that you talked about consumers feeling pressure.

Many consumers aren’t making larger purchases right now because rates are high and will likely stay that way for longer here if you take a look at the recent commentary we’re getting from Fed officials here this week.

So all of that taken in context, it leads to a weakening and here in the United States for a lot of these electric vehicles, uh, and as a result, these electric vehicle manufacturers are having to make adjustments to their business and are unfortunately having to lay off workers. hundreds of workers. accordingly here in an effort to reduce costs.

But in terms of this restructuring effort, everyone is saying that they’re going to incur charges of about 21 to 25 million euros as a result of this restructuring plan, most of that will be recognized here over the course of the current quarter.