Lucid Group has eliminated roughly 18% of its workforce — the second significant round in four months — under CEO Silvio Napoli, who took over June 1 and immediately scrapped a second production shift and the COO role. The company's Q1 gross margin was negative 110% and its 2026 production guidance is suspended.

Lucid Group (NASDAQ: LCID) laid off approximately 18% of its workforce Monday — roughly 1,400 to 1,500 employees — in the Newark, California EV maker's second major reduction this year, with newly installed CEO Silvio Napoli eliminating the company's second production shift at its Arizona plant and scrapping the chief operating officer role entirely.

The June 22 announcement is the follow-up to a 12% workforce cut in February that included a California WARN Act notice for 319 positions at Lucid's Newark headquarters (effective April 21). Together, the two rounds reduce Lucid from a roughly 9,000-person peak at end of 2025 to an estimated 6,400 to 6,500 employees — a net reduction of about 28%. The company projects $158 million in annualized savings from the latest cuts; severance and benefits charges will total approximately $32 million, per Electrek and TechCrunch reporting citing the company's disclosures.

The restructuring is Napoli's opening move. A Swiss industrial executive and former chairman and CEO of Schindler Group, he assumed the CEO role on June 1 — after Marc Winterhoff spent fifteen months as interim chief following founder Peter Rawlinson's unexpected departure in February 2025. Winterhoff is now out, and the COO position has been permanently eliminated. Three weeks into a new CEO's tenure is when the reset gets announced.

The financial backdrop makes the urgency legible. Lucid's Q1 2026 gross margin came in at negative 110.4%, deteriorating from Q4 2025's negative 80.7%, as the company built 5,500 units while delivering only 3,093 — a production-to-demand mismatch that the second Arizona shift was actively worsening. Management suspended 2026 production guidance of 25,000 to 27,000 units in May pending Napoli's strategic review.

Capital is not the immediate crisis. Saudi Arabia's Public Investment Fund holds a 56.85% equity stake via its Ayar Third Investment Company, has committed $9.5 billion to Lucid since 2018, and closed a fresh $1.05 billion infusion in April — $550 million in preferred notes carrying a 9% PIK dividend, $200 million from Uber, and $300 million in a registered public offering. Pro forma liquidity sits at approximately $4.7 billion with runway into the second half of 2027, per Q1 earnings disclosures.

What Napoli hasn't provided is a revised production outlook. The next formal guidance is expected at the Q2 2026 earnings call — the first real test of whether these cuts are a reset or the first leg of something longer. Watch whether the Q1 delivery shortfall closes at all by Q2, and whether the February WARN Act notice triggers further compliance review from Strauss Borrelli, the law firm that opened an investigation into timing violations from that first round.