The recent reports of global layoffs have had a significant impact on Tesla’s shares, causing a drop in premarket trade. Tesla shares were down over 1% in premarket trade on Monday following media reports that the automaker would be laying off more than 10% of its global workforce. This news led to a 1.2% decrease in the company’s stock during premarket deals around 7:30 a.m. ET. Tesla CEO Elon Musk emphasized the importance of cost reductions and increasing productivity as the company prepares for its next phase of growth. According to an internal memo cited by Reuters and referenced by tech publication Electrek, Tesla made the difficult decision to reduce its headcount globally by more than 10%.
Despite having 140,473 employees as of December 2023, Tesla is facing challenges in the market. The company’s shares have experienced a 31% decline in the year-to-date, attributed to diminishing demand for electric vehicles and intensified competition from Chinese automakers. Earlier this month, Tesla reported its first annual decline in vehicle deliveries since 2020 due to the disruptive effects of the Covid-19 pandemic. First-quarter deliveries fell by 8.5% compared to the previous year, with production down by 1.7% year-over-year and 12.5% sequentially. While deliveries provide an estimate of Tesla sales, they are not precisely defined in the company’s shareholder communications.
In response to the evolving market conditions, Tesla has made strategic adjustments such as reducing the subscription price of its premium driver assistance system, the Full Self-Driving package, for U.S. customers. This move contrasts with Musk’s earlier promises that the FSD fee would only increase as the system’s features and functionality improved. These developments highlight the dynamic nature of Tesla’s operations and its efforts to adapt to changing industry landscapes. This breaking news story is continuously being updated as more information becomes available.
Please stay tuned for more updates on this developing situation regarding Tesla’s layoffs and the impact on its financial performance and market position.
