Lucid Motors CEO Peter Rawlinson poses on the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) begins trading on the Nasdaq exchange after completing its business combination with Churchill Capital Corp IV in New York City, New York March 26, 2017 July 2021.
Andrew Kelly | Reuters
Struggling EV Manufacturer Clear said in a regulatory filing on Tuesday that it plans to cut about 18% of its workforce, or about 1,300 employees, as part of a major restructuring to cut costs while it works to ramp up production of its luxury sedan Air.
Lucid said one-time costs associated with the downsizing will total between $24 million and $30 million, with most of that amount being recognized in the first quarter of 2023.
News of the job cuts was first reported by Insider on Tuesday. Lucid shares closed down over 7% on Tuesday, according to the insider report.
In a letter to employees, CEO Peter Rawlinson said the job cuts will affect “almost all organizations and levels, including senior management” and that affected employees would be notified within the next three days. Severance packages will include continued health insurance paid for by Lucid, as well as stock ownership acceleration, Rawlinson wrote.
Lucid ended 2022 with about $4.4 billion in cash, enough to last through the first quarter of 2024, CFO Sherry House told CNBC last month ahead of the company’s fourth-quarter earnings report. However, there are signs that demand for the high-priced Air has fallen short of Lucid’s internal expectations, and the company may struggle to convert early reservations into sold orders.
Lucid said that as of February 21, its last update, it had more than 28,000 reservations for the Air. But it also said it plans to build just 10,000 to 14,000 vehicles in 2023, far fewer than the roughly 27,000 Wall Street analysts had been expecting.
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With Lucid’s factory currently set up to build about 34,000 vehicles a year, the company has warned of continued losses.
“As we produce vehicles in low volume on production lines designed for higher volume, we have and will continue to experience negative gross profit related to labor and overhead costs,” House said during Lucid’s Feb. 22 conference call.
Lucid has not yet announced a date for its first-quarter earnings report.