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ucid Group, a manufacturer of electric vehicles, announced that it would lay off approximately 18 per cent of its workforce, or approximately 1,300 employees, as part of a cost-cutting strategy.

Last month, the manufacturer of the Air luxury sedan forecast 2023 production that fell far short of analysts’ expectations and reported a significant drop in orders during the fourth quarter.

CEO Peter Rawlinson said in a letter that the company plans to communicate the plan to all of its employees over the next three days, and that its US workforce will be reduced in nearly every organisation and level, including executives.

Lucid, which had approximately 7,200 employees at the end of last year, will incur related charges ranging from USD 24 million to USD 30 million. The restructuring plan is expected to be substantially completed by the end of the second quarter.

Companies in the United States are cutting costs as they prepare for a possible recession in the face of aggressive interest rate hikes by central banks.

According to industry experts, Tesla Inc’s price cuts 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.

Rivian announced last month that it would lay off 6 per cent of its workforce in an effort to cut costs.

After the announcement, Lucid’s shares closed down about 7 per cent in regular trading.