The encyclopedia · People & Management · People decision · 2026
Lucid cut 18% of its US workforce and eliminated the COO role — two rounds in five months
After a 12% layoff in February, the EV maker cut another 18% in June, lost its COO, suspended guidance, and burned $3.8 billion in free cash flow.
Lucid Group
What happened
Lucid Group cut about 18% of its US workforce in June 2026, including full-time employees, contractors and hourly production workers at its Arizona factory. The layoffs followed a 12% reduction in February — two rounds totalling roughly a quarter of the company's workforce within five months. Chief operating officer Marc Winterhoff left effective immediately, and the COO role was eliminated.
The company described the cuts as necessary 'to align production with demand, reduce inventory, and adapt to declining market conditions.' It eliminated the second shift at its AMP-1 plant in Arizona. Expected annualized savings were about $158 million, against $32 million in cash severance charges.
The layoffs came as US EV adoption slowed and the federal $7,500 tax credit was eliminated under the Trump administration. Lucid had lost $2.7 billion on revenue of $1.35 billion in 2025, with negative free cash flow of $3.8 billion. It suspended guidance in May 2026, citing elevated inventory. The restructuring was the first major move by CEO Silvio Napoli, who took over from Peter Rawlinson on June 1.
Why it happened
- Lucid built capacity for a demand that did not materialise — two layoff rounds in five months show the original production plan was based on an EV adoption curve that the market did not follow.
- The COO role was eliminated rather than filled, signalling that the company acknowledged its cost structure had outgrown the revenue base and that executive headcount was part of the problem.
- Suspending guidance in May, then cutting 18% of staff in June, suggests the leadership did not recognise the severity of the demand shortfall until after the February layoffs proved insufficient.
The lesson
A layoff round that does not fix the cash problem guarantees a second round, and the second round always comes when the team is already demoralised.
Sources
- Lucid to lay off roughly 18% of U.S. workforce, COO Marc Winterhoff leaves — CNBC
- Lucid Motors' new CEO cuts 18% of staff to 'simplify the company' — TechCrunch
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