Lucid plans to cut 12% of jobs, expecting to save about $500 million in costs over three years
Lucid Motors announced on Tuesday that it will cut about 12% of non-hourly positions in the United States, expecting to incur costs of $40 million to $42 million and achieve cost savings of about $500 million over three years. This move aims to optimize operations, advance the development of mid-size platforms, robotaxis, and ADAS technologies, while addressing industry regulatory and tariff uncertainties.
Key Points:
- Electric vehicle maker Lucid Motors announced on Tuesday that it will cut about 12% of its U.S. non-hourly workforce, excluding hourly workers in manufacturing, logistics, and quality inspection departments.
- The plan, launched after the rollout of the Gravity (the company's first SUV), aims to reallocate resources and support the company's transition into a new phase of "discipline and margin improvement," Chief Financial Officer Taoufiq Boussaid said during the fourth-quarter earnings call.
- "From a financial perspective, the plan is expected to generate approximately $500 million in cost savings over the next three years, with benefits concentrated in the near and medium term, helping us achieve gross margin breakeven," the CFO said.
Deeper Insights:
According to a securities filing, Lucid estimates the layoffs will incur costs of $40 million to $42 million, covering severance, employee benefits, and employee transition costs. The company said it expects to "substantially complete" the plan by the end of the second quarter of 2026, depending on local legal and consultation requirements.
The filing shows that the layoffs will help the company optimize operating expenses while focusing on the launch of mid-size platform production, entering the robotaxi market, developing advanced driver assistance system technology, and selling and distributing current models in existing and new markets.
"This difficult but necessary decision is to improve operational efficiency and optimize resources as we continue to move toward profitability," Lucid's interim CEO Marc Winterhoff said during Tuesday's earnings call.
The plan comes as Lucid attempts to establish a foothold in a challenging industry segment, facing obstacles such as ongoing regulatory policy changes over the past year and disruptions from tariff and trade policies.
The EV maker reported fourth-quarter total revenue of $522.7 million, up 123% year over year. However, the company also reported an adjusted EBITDA loss of $875 million, compared with a loss of $577 million in the same period last year.
Boussaid said the loss reflected "high ramp-up costs"—expenses related to scaling production—partially offset by higher fourth-quarter sales volumes.