Lucid’s CEO said the company remains committed to expanding globally despite the reduction in headcount.
US EV maker Lucid Group Inc (NASDAQ:LCID) has revealed plans to reduce workforce, laying off around 18% of its workforce. The company announced job cuts in a seconds According to a March 27 filing, Lucid is laying off workers as part of a larger restructuring plan to reduce expenses. Retrenchment of employees is no longer news in the markets. Over the years, amid economic uncertainties, many companies across various sectors have had to lay off some employees. Like Lucid, many companies cited “reducing expenses or costs” as the reason for reducing their workforce. While some fired a single shot, others launched multiple sorties.
Lucid Files for Low Headcounts
In an SEC filing, Lucid said it is reducing its workforce to reduce costs and increase its production. Air Luxury Sedan, The company specified that the decision is “in response to evolving business needs and productivity improvements.” The layoffs will result in a charge of approximately $24 million to $30 million. The luxury automaker noted that the fee will cover severance pay, employee transition, benefits and stock-based compensation. According to the company, the charges of approximately $22 million to $28 million will be recognized in the first quarter of 2023. It added that most of the charges are expected to be paid by the end of the second quarter. Speaking further on downsizing the workforce, Lucid explained:
“Estimates of fees and expenses 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 the actual amount may differ materially from the estimates. The Company may also incur other charges or cash expenses not currently contemplated due to unforeseen events that may occur in connection with the implementation of the plan.
Peter Rawlinson, Lucid’s CEO and chief technology officer, emailed the company’s employees to inform them of the decision to cut the workforce. He revealed The decision will affect both employees and contractors. The CEO noted that affected workers will receive severance packages, continued healthcare coverage, and more. The company plans to contact layoff victims three days before the end of March. In addition, Rawlinson noted that the US workforce will experience downsizing in almost every organization and level, including executives.
Going forward, Lucid’s CEO said that the company remains committed to expanding globally despite the reduction in headcount. He expressed his confidence in the company’s advanced technology, operational infrastructure and track record of perseverance.
At the current trading price of $7.57 per share, LCID closed down more than 7% following news of its layoffs.
Ibukun is a crypto/finance writer interested in delivering relevant information using non-complicated words to reach all types of audiences. Apart from writing, she enjoys watching movies, cooking and exploring restaurants in the city of Lagos where she lives.
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