Lidar company Luminar is slashing its workforce by 20% and will lean harder on its contract manufacturing partner as part of a restructuring that will shift the company to a more “asset-light” business model, as it aims to scale production.

The cuts will affect around 140 employees, and are starting immediately. Luminar is also cutting ties with “the majority” of its contract workers.

“Today, we stand at the crossroads of two realities: the core of our business has never been stronger across technology, product, industrialization, and commercialization; yet at the same time the capital markets perception of our company has never been more challenging,” billionaire founder and CEO Austin Russell said in a letter posted to Luminar’s website. “[T]he business model and cost structure that enabled us to achieve this leadership position no longer fit the needs of the company.”

Russell wrote in the letter that the restructuring will make it possible for Luminar to get products to market faster, “drastically reduce” costs, and set the company up better for profitability. The company said in a regulatory filing that the changes will reduce operating costs “by $50 million to $65 million on an annual basis.” The company is also reducing its global footprint “by sub-leasing portions or the entirety of certain facilities.”

Luminar will continue to operate its Florida facility, which is used for development, testing and research and development, according to spokesperson Milin Mehta.

Luminar announced in April that it had begun shipping production lidar sensors to Volvo to be built into the automaker’s EX90 luxury SUV. It also announced plans to deepen its relationship with Taiwanese contract manufacturing company TPK Holding. TPK has “committed to an exclusive relationship with Luminar,” Russell wrote in his letter.