US Markets
Monday, April 15th, 2024 2:19 pm EDT
Key Points
- Tesla announces a reduction of more than 10% of its global workforce as part of preparations for the next phase of growth, citing the need for cost reductions and increased productivity.
- The company’s shares have experienced a decline of about 2%, reflecting broader challenges faced by Tesla, including a 31% year-to-date decrease in share value and slowing sales growth, especially in the face of heightened competition in the EV market, notably from Chinese manufacturers.
- Elon Musk, in a memo to employees, expresses gratitude to departing staff while emphasizing the importance of remaining employees in driving forward Tesla’s innovative technologies in auto, energy, and artificial intelligence, as the company braces for a pivotal growth phase.
Tesla, led by CEO Elon Musk, announced in a memo to its employees a significant reduction in its global workforce by more than 10% as the company prepares for its next phase of growth. Musk emphasized the necessity of cost reductions and increased productivity in every aspect of the company’s operations. The decision comes amidst a challenging period for Tesla, reflected in a 2% decline in shares and a year-to-date decrease of 31%. Despite the continued popularity of electric vehicles (EVs) globally, Tesla has faced slowing sales growth and heightened competition, with Chinese companies like BYD and Xiaomi making notable strides in the EV market. Musk acknowledged China’s potential to host formidable competition, with some potential Tesla customers reportedly deterred by Musk’s controversial remarks. Moreover, Tesla recently reported its first annual decline in vehicle deliveries since 2020, with logistical challenges further impacting production. Musk expressed gratitude to departing employees while emphasizing the importance of remaining staff in driving Tesla’s revolutionary technologies forward. The company’s operating margin has been squeezed, prompting warnings of potentially lower growth rates in the future. Challenges such as supply disruptions and production halts have compounded Tesla’s difficulties. The memo from Musk underscores the company’s efforts to streamline operations, maintain innovation, and navigate through a pivotal phase of growth and transformation.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/04/15/tesla-shares-dip-in-premarket-trade-on-global-layoff-reports.html
