EV startup Lucid plans to reduce its personnel by around 18%

The manufacturer of electric vehicles, Lucid Group Inc., announced on Tuesday that it will restructure its business and eliminate 1,300 jobs, or approximately 18% of its staff.

The manufacturer of the Air luxury car announced a production prediction for 2023 last month that was well below analyst expectations and revealed a significant decline in orders during the fourth quarter.

CEO Peter Rawlinson stated in a letter that the business intends to inform all of its workers about the plan over the course of the next three days. He also added that its American workforce will experience cutbacks in practically every organization and level, including executives.

The associated costs for Lucid, which had around 7,200 workers at the end of last year, will range from $24 million to $30 million. By the conclusion of the second quarter, the corporation anticipates having completed the reorganization strategy in large part.

We are currently assessing all non-critical spending as part of our ongoing efforts to minimize our expenses, Rawlinson added.

As a result of aggressive interest rate increases by central banks, businesses in the United States are cutting costs as they prepare for an impending recession.

According to industry analysts, demand for new cars from startups like Lucid and Rivian Automotive Inc. has been affected by price reductions by market leader Tesla Inc. and the availability of less expensive EV models from conventional manufacturers.

In an effort to reduce expenses, Rivian said last month that it will fire 6% of its personnel.

Shares of Lucid decreased roughly 7% at the closing of regular trading.