Lucid Group (LCID) experienced a rise of over 1% in its stock value before market opening on Friday following the announcement of its restructuring strategy. This strategy involves reducing its workforce in the United States by approximately 400 employees, or about 6%, including both permanent employees and contractors.
LCID explained that the goal of the strategy is to improve the company’s operating expenses in light of evolving business needs and efficiency improvements, particularly as the electric vehicle market faces a period of slower growth.
The workforce reduction will affect various levels of staff, including those in executive and mid-management positions. However, it will not impact hourly employees involved in production and logistics operations at Lucid.
The implementation of this strategy is expected to be completed by the end of the third quarter of 2024.
Lucid estimates that the total cost related to this strategy will range from approximately $21 million to $25 million. These costs are expected to primarily cover severance payments, employee benefits, outplacement services, and stock-based compensation.
Additionally, Lucid anticipates recording approximately $19 million to $23 million in additional costs, primarily in the second quarter of 2024. The majority of these costs are expected to be paid by the end of the third quarter of 2024.
Source: investing.com
