EV startup Lucid to cut about 18% of its workforce

(Reuters) -Electric-vehicle maker Lucid Group Inc said on Tuesday it would lay off about 18% of its workforce, or around 1,300 employees, to cut costs as part of a restructuring plan.

The maker of Air luxury sedan last month forecast 2023 production that fell well short of analysts' expectations and reported a major drop in orders during the fourth quarter.

The company plans to communicate with all its employees over the next three days about the plan, CEO Peter Rawlinson said in a letter, adding its U.S. workforce will see reductions in nearly every organization and level, including executives.

Lucid, which had about 7,200 employees at the end of last year, will incur between $24 million and $30 million in related charges. The company expects to substantially complete the restructuring plan by the end of the second quarter.

"We are also taking continued steps to manage our costs by reviewing all non-critical spending at this time," Rawlinson said.

Companies in the United States are reining in expenses as they brace for a looming recession amid aggressive interest rates hikes by central banks.

Industry experts say price cuts by industry leader Tesla Inc and the availability of cheaper EV models from traditional automakers have weighed on demand for new vehicles from startups such as Lucid and Rivian Automotive Inc.

Last month, Rivian said it would let go of 6% of its workforce in an effort to cut costs.

Lucid's shares closed down about 7% in regular trading.

(Reporting by Akash Sriram and Raghav Mahobe in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)