Lucid Group (NASDAQ: LCID) has recently made headlines with some concerning news that investors may not be thrilled about. The electric vehicle manufacturer, known for its luxury vehicles, has been struggling financially, with a net loss of $680.859 million in the first quarter of this year.
One of the recent developments at Lucid Group is the announcement of layoffs, affecting around 400 employees, or approximately 6% of the company’s workforce. This move comes on the heels of a previous round of layoffs last year, where 1,300 positions were cut in an effort to reduce costs.
While Lucid Group’s management has tried to spin these layoffs as a strategic decision to optimize operating expenses and improve productivity, the reality is that cutting jobs can be costly in the short term. The company expects to incur charges of $21 million to $25 million related to the restructuring.
Despite these cost-cutting measures, Lucid Group’s stock price has remained below $5, keeping it in the realm of penny stocks. With the company facing financial challenges and uncertainty about its future profitability, investors may want to steer clear of this risky investment.
As Lucid Group gears up to launch its Gravity electric SUV later this year, the impact of the layoffs on production and operations remains to be seen. With the stock receiving an “F” grade and little hope of breaking above $5 in the near future, it may be best for investors to avoid getting involved with Lucid Group for now.