HomeBusinessTesla expands its 2024 stock shortfall to 34% as top executives reportedly...

Tesla expands its 2024 stock shortfall to 34% as top executives reportedly leave amid job cuts

Tesla announced layoffs.Justin Sullivan

  • Tesla shares extended their 2024 stock decline to 34% on Monday, with shares down 3%.

  • Monday’s drop comes after the company said it would cut 10% of its workforce due to declining demand for electric vehicles.

  • Tesla CEO Elon Musk said in a memo that there is a “duplication of roles and functions” in certain areas.

Shares of Tesla fell just over 3% on Monday, extending their year-to-date decline to 34% after the company laid off more than 10% of its workforce, or more than 14,000 employees.

Tesla CEO Elon Musk sent a memo to employees on Sunday, announcing that the EV automaker would be cutting jobs amid “a doubling of roles and functions in certain areas.”

Two top executives at Tesla left amid the layoffs, including senior vice president Drew Baglino, who led the company’s engineering for its batteries, motors and energy products. Baglino worked at Tesla for 18 years and often shared the stage with Musk during product announcements and co-hosting company earnings calls.

See also  US consumer prices will rise less than expected in April; core CPI slows

The other departed director is Rohan Patel, who was Tesla’s vice president of public policy and business development.

When a company announces job cuts, the stock price usually rises as investors applaud the cost-cutting measures and expect higher profits in the future.

But Tesla’s stock slide following its round of job cuts is being met with caution on Wall Street as the investment community grows concerned about weakening demand for electric vehicles.

Earlier this month, Tesla reported first-quarter deliveries that heavily exceeded Wall Street estimates and represented the company’s first quarterly year-over-year sales decline since 2020.

“Inventory built up in the first quarter and it appears that the main driver of the lower delivery numbers was declining demand for electric vehicles in all regions, especially in North America, where electric car sales volumes have largely declined since summer 2023 have remained flat,” says Bank of America. said in a note last week.

See also  Why shares of Alibaba, JD.com and PDD Holdings fell today

For his part, Musk said in the memo that the job cuts “will allow us to be lean, innovative and hungry for the next growth phase cycle.”

This is Tesla’s first large-scale job cuts since it laid off workers at its Buffalo, New York, factory in February 2023.

Read the original article on Business Insider

- Advertisement -


Please enter your comment!
Please enter your name here

Most Popular

Recent Comments