Lucid Group announced on Monday it is cutting approximately 18% of its US workforce as part of a sweeping cost-reduction plan, marking the Saudi-backed electric vehicle maker’s second significant round of layoffs in 2026.
The cuts, which affect full-time employees, contractors and hourly production workers in manufacturing, are expected to generate annualised savings of approximately $158 million. Lucid also confirmed the departure of Chief Operating Officer Marc Winterhoff, effective immediately, and said the COO role has been permanently eliminated.
Who Is Leaving and What Changes at the Top
Winterhoff had served as Lucid’s interim chief executive for more than a year before Silvio Napoli formally assumed the CEO role on 1 June. Despite earlier indications that Winterhoff would remain at the company in an operational capacity, Monday’s announcement confirmed his exit alongside the elimination of the position itself.
Napoli, whose background is in industrial manufacturing rather than the automotive sector — he spent his career at Swiss elevator and escalator maker Schindler Group — now leads the company through what is shaping up to be one of the most consequential restructuring efforts in its history.
Lucid’s executive suite has seen considerable turbulence in recent years. Longtime departed abruptly in February 2025. Chief Engineer Eric Bach was let go in late 2025 and subsequently filed a wrongful termination lawsuit. More than a dozen senior executives have left the company over the past two years.
The Scale of the Cuts and What They Cost
Lucid had approximately 9,000 employees globally as of 31 December 2025. The 18% reduction represents roughly 1,500 positions across full-time staff, contractors and hourly manufacturing workers at its AMP-1 factory in Casa Grande, Arizona.
The company said it expects to incur cash charges of approximately $32 million related to severance, employee benefits and transition support for affected workers. In a regulatory filing with the Securities and Exchange Commission, Lucid said it would also eliminate the second production shift at its Arizona plant, further curtailing output as it seeks to bring inventory levels down.
“These are difficult decisions taken to align production with demand, reduce inventory, and adapt to declining market conditions,” a Lucid spokesperson said. “They are part of a broader effort to simplify the company, sharpen execution, and position Lucid to become more competitive over time.”
Second Round of Cuts in Four Months
Monday’s announcement is the second major workforce reduction Lucid has carried out this year alone. In February, the company eliminated approximately in a push for profitability, a round of cuts that cost roughly $40 million in the near term but was projected to deliver up to $500 million in savings over several years.
Taken together, the two rounds of cuts in 2026 have reduced Lucid’s headcount by close to 30% within the span of a single year — a pace of restructuring that is unusual even by the standards of an EV sector that has been broadly contracting since the post-pandemic boom receded.
A Cooling EV Market and the End of Federal Incentives
The backdrop to Lucid’s difficulties is a US electric vehicle market that has shifted markedly from the conditions that prevailed when the company went public in 2021 with projections of producing hundreds of thousands of vehicles annually.
The Trump administration’s elimination of the $7,500 federal tax credit for EV purchases has removed a significant financial incentive for buyers at the lower and mid-range of the market. Stricter fuel efficiency targets have also been rolled back, reducing regulatory pressure on traditional automakers to accelerate their shift to electric vehicles — and, by extension, reducing the urgency that once underpinned consumer interest in the sector.
Major automakers have pulled electric models from their product plans. EV-only startups, meanwhile, are navigating a market in which demand has not grown at the pace that earlier projections assumed, while competition from established manufacturers with far greater scale has intensified.
guidance entirely last month, citing the need to evaluate its business operations under new leadership. The company had originally guided for between 25,000 and 27,000 vehicles in 2026, already a significant retreat from the ambitions it set out at its IPO.
The Financial Picture
The scale of Lucid’s financial challenge is considerable. The company lost $2.7 billion on revenue of $1.35 billion in 2025, and reported negative free cash flow of $3.8 billion for the year, roughly 31% larger than the prior year’s figure.
Lucid is majority-owned by Saudi Arabia’s Public Investment Fund, which has continued to provide financial backing that has allowed the company to absorb successive rounds of losses without facing an immediate existential crisis. That backing has been a critical lifeline, but it has not resolved the fundamental challenge of building a sustainable business at current production volumes and cost structures.
At its first investor day in nearly five years, held in March, Lucid said it expects to be cash-flow positive by later this decade.
What Comes Next: The Cosmos and a Bet on Mass Market
Despite the cuts, Lucid has not abandoned its product roadmap. The company is betting its near-term prospects on two upcoming mass-market electric crossovers. The Lucid Cosmos, expected to start at under $50,000 and positioned to rival the Tesla Model Y and the Rivian R2, is slated to begin production before the end of this year. A second model, the Lucid Earth, is expected to follow by the end of 2027.
The company is also pursuing a foothold in the autonomous vehicle sector, partnering with Uber and robotics company Nuro on a luxury robotaxi service planned to launch in San Francisco later this year.
Whether those bets prove sufficient to stabilise the business will depend significantly on whether Napoli can bring the operational discipline to Lucid that the company has long promised but struggled to deliver. Two mass layoffs in four months, a revolving door of senior executives, and a production target that has already been suspended suggest the reset is still very much in progress.