Tesla plans to lay off more than 10 percent of its global workforce.
New York:
Tesla plans to lay off more than 10 percent of its global workforce, news site Electrek reported Monday, publishing an email from Chief Executive Elon Musk announcing the cuts.
The job reductions are needed after rapid growth that has led to duplication of roles, Musk said in the email to staff, according to Electrek, an online news site focused on electric vehicles (EV).
“There is nothing I hate more, but it must be done,” Musk said. “This will enable us to be lean, innovative and hungry for the next growth phase cycle.”
The move comes about 10 days after Tesla reported a drop in first-quarter auto deliveries in a report that disappointed investors.
Musk’s company has also undertaken a series of price cuts on EV’s in response to rising competition among producers and slowing demand growth in some markets.
While Tesla is being proactive about cost cutting given “disastrous” first quarter deliveries and overall pressure on the business, “this is a large cost cutting initiative for a company in between two growth waves,” said analysts at Wedbush.
They added that “the string of bad news over the last few months has been a horror show for investors,” stressing the need for an explanation behind cost cuts and other issues.
But White House Press Secretary Karine Jean-Pierre told reporters that EV sales have surged in recent times while the vehicles are “more affordable than ever.”
Although she could not speak on Tesla’s decision, she said that President Joe Biden’s administration has been making efforts in manufacturing, boosting EV production and lowering costs.
Tesla late last year began deliveries of the Cybertruck, a space age-inspired vehicle that Musk has praised while warning that it would take time to ramp production to reach profitability.
Shares of Tesla closed 5.6 percent lower on Monday.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)