Luminar Technologies Inc. saw a decline of over 9% in its shares during extended trading on Friday. The company, known for its production of lidar and other sensors for self-driving vehicles, announced a workforce reduction of 20% as part of its restructuring plan.
Luminar LAZR stated that Friday’s announcement was in line with its previous commitments made during the fourth-quarter earnings report in February.
The company stated in a regulatory filing that the layoffs are part of an effort to realign its workforce with its top priorities and core competencies. Additionally, the layoffs aim to eliminate redundancies and reduce operating costs.
In a previous report, Luminar disclosed that it employed close to 800 full-time staff members primarily located in the United States, Germany, Sweden, India, and China by the end of December. It was mentioned that none of the employees have labour union representation.
Luminar has announced that it will be reducing its office space by subleasing some of its facilities as part of its plan. The company has announced that the actions will commence right away and are projected to be finished by the end of the year.
Luminar is projecting cash charges of approximately $6 million to $8 million for employee severance and related costs. These charges are expected to be primarily incurred during the second and third quarters of this year.
The company requested additional funding of $2 million to $5 million for subleasing facilities, which is expected to result in losses for the remainder of the year.
After its completion, the plan is expected to result in a significant reduction in operating costs, estimated to be between $50 million and $65 million annually. Luminar has stated that a substantial portion of these savings, ranging from $20 million to $30 million, will come from cash cost reductions.
The company is scheduled to announce its first-quarter earnings after the market closes on Tuesday.
According to analysts surveyed by FactSet, the company is projected to report an adjusted loss of 18 cents per share, with sales totaling $21.2 million. In the first quarter of 2023, there was an adjusted loss of 24 cents per share on sales of $14.5 million.
Luminar’s stock has experienced a significant decline of 50% this year, in stark contrast to the S&P 500 index which has seen gains of approximately 7.5%.
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