Lucid Group (NASDAQ:LCID) rose over 1% premarket Friday after the company announced a restructuring plan that will see it cut its current US employee and contract workforce by approximately 400 employees or approximately 6%
LCID said the plan is intended to optimize the company's operating expenses in response to evolving business needs and productivity improvements as the electric vehicle industry deals with slower growth.
The cuts will impact employees at all levels, including leadership and mid-level management. However, it will not impact Lucid's hourly manufacturing and logistics workforce.
The plan is expected to be complete by the end of the third quarter of 2024.
Lucid estimates that it will incur a total of approximately $21 million to $25 million in charges in connection with the plan, which consist primarily of charges related to severance payments, employee benefits, employee transition, and stock-based compensation.
In addition, charges of approximately $19 million to $23 million are expected to be recognized primarily in the second quarter of 2024, with the majority of the charges anticipated to be paid by the end of the third quarter of 2024.