The shares of Lucid Group LCID gained 3% in pre-market trading after the California-based EV maker said on Friday that it is laying off about 6% of its workforce or 400 employees to reduce costs.
What Happened: The layoff is part of the company’s restructuring plan and Lucid intends to complete it by the end of the third quarter, the company said in a filing on Friday. The company expects to incur a total of about $21 million to $25 million in charges as part of the plan, including severance payments and employee benefits.
During the pre-market session, Lucid stock was up 2.94% after closing at $2.72 on Thursday.
The layoffs are expected to impact employees at all levels, including leadership and mid-level management, company CEO Peter Rawlinson said in an email to employees. The workforce reduction, however, will not affect the company’s hourly manufacturing and logistics workforce, he added.
“Letting go of our talented team members is difficult and a decision we did not take lightly. We are thankful to everyone who has helped Lucid at every step of our journey. Accordingly, we have extended severance and health benefits to the impacted employees, and we are offering them outplacement services,” he wrote.
Why It Matters: For the first quarter, Lucid reported a net loss of $680.9 million and a revenue of just $172.7 million. The company accumulated a net loss of over $346,000 for every vehicle it delivered.
However, as of the end of the first quarter, Lucid had total liquidity of about $5.03 billion, which the company expects will be enough to sustain it through the start of production of the Gravity SUV and into the second quarter of 2025.
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