Lucid expects 12% workforce reduction to yield $500M in cost savings

Dive Brief:

Electric vehicle manufacturer Lucid Motors is slashing its U.S. workforce by about 12%, excluding hourly production workers in manufacturing, logistics and quality, the company said Tuesday.
The plan was launched to reallocate resources following the launch of Gravity, the company’s first SUV model, and to support a new phase of “discipline and margin progression,” CFO Taoufiq Boussaid said during a fourth-quarter earnings call.
“Financially, this initiative is expected to deliver approximately $500 million in cost savings over the next three years, with benefits weighted towards the near and medium term, supporting our path toward gross margin break-even,” the finance chief said.

Dive Insight:

As a result of the job cuts, Lucid estimates that it will incur charges of $40 million to $42 million related to severance, employee benefits and employee transition, according to a securities filing. The company said it expects to “substantially” complete the plan by the end of the second quarter of 2026, subject to local law and consultation requirements.

“This difficult but necessary decision was made to improve operational effectiveness and optimize our resources as we continue on our path towards profitability,” Marc Winterhoff, Lucid’s interim CEO, said during the Tuesday earnings call.

The planned workforce reduction will help the company optimize operating expenses as it focuses on the start of midsize platform production, expansion into the robotaxi market and development of advanced driver assistance system technologies, and the sale and distribution of its current models in existing and new geographies, the filing said.

The plan comes as Lucid seeks to gain ground in an industry segment that has faced challenges including ongoing shifts in regulation and disruptions in tariff and trade policy during the past year, as reported by CFO Dive.

The electric vehicle maker posted $522.7 million in total revenues during the fourth quarter, up 123% year over year. But the company also reported adjusted earnings before interest, taxes, depreciation, and amortization losses of $875 million, compared with $577 million during the year-earlier period.

The losses reflect “high ramp costs” — expenses tied to scaling up production — that were partially offset by higher sales in Q4, according to Boussaid.