HomeBusinessTesla shares fall as company cuts 'more than 10%' of global workforce

Tesla shares fall as company cuts ‘more than 10%’ of global workforce

Tesla (TSLA) will lay off more than 10% of its global workforce, at least 14,000 employees, according to media reports and an internal memo from CEO Elon Musk that was leaked online Monday. TSLA shares headed lower early Monday.


Tesla and Musk have telegraphed that 2024 will be tough for business all year long, starting with the company’s fourth-quarter earnings results in late January. Monday’s move to reduce its workforce is the latest sign that Tesla is facing problems as demand for electric vehicles declines and competition increases.

Electrek first reported on the rumored layoffs over the weekend and confirmation Monday.

Musk wrote on Monday that Tesla has grown rapidly over the years and that there are “duplicate roles and hot plate functions in certain areas.”

“As we prepare the company for our next phase of growth, it is extremely important to look at every aspect of the business with an eye toward cutting costs and increasing productivity,” Musk wrote in the companywide email on Monday.

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“We are developing some of the most revolutionary technologies in automotive, energy and artificial intelligence,” he added.

Shares of Tesla fell more than 3% during Monday morning’s stock market action. On Friday, TSLA fell 2% to 171.05.

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Tesla’s decision to reduce its workforce follows lackluster first-quarter deliveries and a Reuters report that it has canceled its long-promised next-generation $25,000 vehicle and opted to focus on developing its self-driving robotaxi -platform.

Reuters wrote, citing three anonymous sources and internal reports, that Tesla no longer plans to make its low-cost entry-level model, the Model 2, and will continue developing its robotaxi on “the same small vehicle platform.”

However, Elon Musk and others at Tesla have questioned the accuracy of the report. Following the publication of the Reuters story, Musk also announced that Tesla will unveil the robotaxi on August 8.

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Meanwhile, Tesla Cybertruck deliveries appear to be complete for the year. The Cybertruck, which was rolled out to customers in late November 2023, will only be available from Monday for delivery in 2025, according to Tesla’s website.

Tesla stock performance

Tesla lowered the price of Supervised Full Self-Driving (FSD) from $199 to $99 per month on Friday evening. The EV company is offering a one-month free trial of FSD in April in the US for new purchases or existing EVs that support FSD.

TSLA shares rose 3.7% to 171.05 this week, buoyed by Elon Musk’s promise of unveiling a robotaxi on August 8.

TSLA stock is trading below its 50-day moving average, after falling about 13% in March.

Tesla stock has plummeted in 2024, but at least it’s cheaper, right? No

Tesla will report first-quarter profit and revenue on April 23. According to the Wall Street consensus, Tesla earnings for 2024 are well below 2023 levels. That signals a new year of profit declines for this growth stock. According to FactSet, Wall Street currently expects Tesla earnings per share of just $2.70 in 2024. That would be a decline of more than 13% from last year’s $3.12.

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Wall Street’s 2024 consensus estimates for Tesla have fallen 29% since the end of 2023.

Looking further ahead, the Wall Street consensus calls for Tesla’s 2025 earnings per share to reach $3.70, down from the projection of $5.29 at the end of 2023, according to FactSet.

The EV giant ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a Composite Rating of 32 out of a best possible 99. Tesla stock also has a Relative Strength Rating of 12 and an EPS Rating of 67.

Follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.


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