Tesla confirmed its laying off more than 10% of its global workforce following weak first quarter deliveries and increasing competition in the electric vehicle (EV) market, according to a filing with the Securities and Exchange Commission.
With this rapid growth, there has been a duplication of roles and job functions in certain areas.
We believe it is extremely important to look at every aspect of the Company for cost reductions and increasing productivity.
This action will prepare Tesla for our next phase of growth, as we are developing some of the most revolutionary technologies in auto, energy and artificial intelligence”, the filing detailed.
Tesla did not immediately respond to FOX Business Digital’s request for comment.
TESLA STOCK SLIDES ON BIG DELIVERIES SHORTFALL The lay-offs come after Electrek reported that Tesla had told managers to identify critical team members, paused some stock rewards, canceled some worker’s annual reviews and reduced production at Gigafactory Shanghai.
Reuters also reported earlier this month that Tesla was abandoning its long-touted plans to produce a budget-friendly starter car, purportedly called Model 2, that was expected to start at $25,000.
Shares of Tesla has dropped over 30% this year.
In response to poor first-quarter sales and heightened competition in the electric vehicle (EV) market, Tesla has confirmed that it is terminating over 10% of its global workforce, per a filing with the Securities and Exchange Commission.
With several plants expanding globally over the years, we have experienced rapid growth. In certain areas, roles and job functions have been duplicated as a result of this quick growth. Looking for ways to cut costs and boost productivity across the board is something we think is critical to the success of the company. This move will set Tesla up for its next growth phase, as the company develops some of the most ground-breaking technologies in the fields of energy, cars, and artificial intelligence, according to the filing.
Following years of rapid growth that resulted in duplication in some roles and functions in some areas of the company, the automaker is looking to cut costs and increase productivity, according to a leaked internal email from CEO Elon Musk, which tech publication Electrek reported on Monday.
Ticker Security Last Change Percentage TSLA TESLA INC. 161 point 48, 9 point 57, and 5 point 59 percentage.
Reuters reported, citing Tesla’s most recent annual report, that the most valuable carmaker in the world employs roughly 140,473 people worldwide. In all, 15,000 employees will be impacted by the reported staffing reduction.
A request for comment from FOX Business Digital was not immediately answered by Tesla.
On shortfalls in big deliveries, Tesla stock declines.
After Electrek revealed that Tesla had instructed managers to identify key team members, halted stock rewards, canceled some employees’ yearly reviews, and lowered output at Gigafactory Shanghai, the company announced layoffs.
It was reported earlier this month that Tesla’s quarterly deliveries missed Wall Street analysts’ estimates and decreased for the first time in almost four years. In the first quarter of this year, Tesla delivered about 387,000 vehicles, well short of the approximately 443,000 that were anticipated. This represents an 8 percent drop from the company’s first quarter of the previous year.
AS EV DEMAND SPUTTERS, SALES OF HYBRID VEHICLE REVVING UP.
Additionally, the automaker has had to lower prices and reduce its margins due to competition from low-cost manufacturers like BYD in China, a crucial market for EV makers.
Reuters also revealed earlier this month that Tesla was giving up on its long-promised plans to build a low-cost entry-level vehicle, rumored to be called the Model 2, with a starting price of $25,000.
Musk said that Reuters was “lying” at the time, but the news organization refuted him by saying that he had pointed out no particular errors in its reporting.
This year, Tesla’s stock has decreased by more than 30%.
