Tesla, the electric car company led by CEO Elon Musk, has announced a significant reduction in staff following a disappointing first quarter delivery report. Musk confirmed in an internal memo that there will be a “more than 10%” reduction in headcount, potentially affecting at least 14,000 workers out of Tesla’s 140,000 global workforce.
The news of the layoffs sent Tesla’s stock sinking in early trading as investors reacted to the reports. The layoffs come after Tesla missed Q1 delivery estimates and built up excess supply, indicating a potential impact of slowing electric vehicle (EV) demand globally.
Analysts are warning that the layoffs could be a negative sign for Tesla’s future growth, especially as Musk has previously complained about high prices hindering EV adoption. However, Musk has countered reports of canceled next-generation vehicles by claiming that Tesla’s robotaxi debut is coming soon.
Tesla is expected to provide more commentary on the layoffs during its earnings report on April 23. Some analysts view the layoffs as a necessary cost-saving measure amid slowing EV growth, while Wall Street remains divided on whether the layoffs are positive or negative for Tesla’s future prospects.
It remains to be seen how the layoffs will impact Tesla’s operations in the coming months and how the company will navigate the challenges of a changing EV market. Stay tuned to Bio Prep Watch for updates on this developing story.