Lucid Group (LCID) said in a filing that it will cut 400 jobs, or about 6% of its workforce, as part of a restructuring effort. The move comes a little more than a year after the electric-vehicle maker cut 1,300 jobs to cut costs ahead of the launch of 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 trends, click here to listen to this entire episode of Morning Brief.
This post was written by Stephanie Mikulich.
Video Transcript
Lucid announced a restructuring plan to optimize the company's operating expenses.
The company is considering cutting about 400 employees.
The stock is currently up about 1.1%.
But it sucks to see pop really endorsing this company, especially when you look at it in a broader way here.
Yes, for the past two days.
But when you tabulate Lucid's year-to-date chart, including the decline over the past 52 weeks, a very different picture emerges.
It's down 35% so far this year.
And that's when they enter the broader EV demand landscape.
They're on the ultra-luxury side here too, so it might be even harder to attract some of the big money to buy that luxury experience.
Ah, yes. There's also a lot of competition from Mercedes and the EV products they're releasing, but is Tesla still around?
Yes, that's right.
This is just one of the by-products, or effects, of the slowdown in EV adoption growth rates, which is forcing many businesses to make tough decisions.
It's also important to point out that Lucid isn't the only company that has had to announce job cuts over the past few quarters.
Even taking into account what has happened over the past few months, Tesla has announced layoffs that will reduce its workforce by about 10%.
Vivian has also implemented several job cuts this year.
So, once again, Lucid will be joining us for the latest one.
And why is it happening?
As you said, consumers are feeling the pressure because of the penetration rate.
If you look at the recent comments that came out from Fed officials here this week, many consumers are not making big-ticket purchases right now because interest rates are high and likely to remain high for a long time to come.
All of this taken into account has led to the weakening of many EV vehicles in the US, forcing EV manufacturers to adjust their operations and, unfortunately, lay off hundreds of employees to cut costs.
However, in terms of the restructuring effort, the company said the restructuring plan will result in charges of approximately $21 million to $25 million, the majority of which will be recognized in the current quarter.
