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 sent by Chief Executive Elon Musk that leaked online Monday. TSLA shares shifted lower early Monday.
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Tesla and Musk have telegraphed 2024 will be difficult for business throughout the year, starting with the company’s fourth-quarter earnings call in late January. The move Monday to cut its workforce is the latest sign Tesla is facing difficulties as EV demand slows and competition ramps up.
Electrek first reported on the rumors of the layoffs over the weekend and the confirmation Monday.
Among those leaving Tesla are Drew Baglino who served as senior vice president of powertrain and energy. Baglino confirmed on X, formerly Twitter, Monday that he “made the difficult decision to move on” from Tesla. The top Tesla executive had been at the company for 18 years.
Rohan Patel, vice president of public policy and business development, also posted on X Monday he is no longer at Tesla. Musk publicly thanked both Patel and Baglino for their time at the company via posts on social media.
The Tesla chief wrote in his memo Monday that Tesla has grown rapidly over the years and there have been “duplication of roles and hob 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 company for cost reductions and increasing productivity,” Musk wrote in the company wide email Monday.
“We are developing some of the most revolutionary technologies in auto, energy and artificial intelligence,” he added.
Tesla stock fell more than 3% to 165.60 during Monday morning’s stock market action. On Friday, TSLA dropped 2% to 171.05.
Latest Headline For Tesla
Tesla’s decision to reduce its head count follows lackluster Q1 deliveries and a Reuters report that it canceled its long promised next-generation $25,000 vehicle, choosing to focus on developing its self-driving robotaxi platform.
Reuters, citing three anonymous sources and internal messages, wrote that Tesla no longer plans to make its low-cost entry-level vehicle, the Model 2, and will continue developing its robotaxi on the “same small-vehicle platform.”
However, Elon Musk and others at Tesla have challenged the veracity of the report. Following the publication of the Reuters story, Musk also announced Tesla will unveil the robotaxi on Aug. 8.
Meanwhile, Tesla Cybertruck deliveries appear done for the year. The Cybertruck, which began rolling out to customers at the end of November 2023, is only available for delivery in 2025, according to Tesla’s website as of Monday.
Tesla Stock Performance
Tesla late Friday cut the price of Supervised Full Self-Driving (FSD) to $99 a month from $199. The EV company is offering a one-month free trial of FSD for April in the U.S. for new purchases or existing EVs that are FSD capable.
TSLA stock gained 3.7% to 171.05 for the week, buoyed by Elon Musk’s promise of a robotaxi unveiling on Aug. 8.
TSLA shares are trading below the 50-day moving average after falling around 13% in March.
Tesla Stock Has Plunged In 2024, But At Least It’s Cheaper, Right? Nope
Tesla reports first-quarter earnings and revenue on April 23. Wall Street consensus has 2024 Tesla earnings firmly below 2023’s level. That signals another year of earnings declines for this growth stock. Wall Street currently expects Tesla earnings per share of just $2.70 in 2024, according to FactSet. That would be more than a 13% decline vs. last year’s $3.12.
Wall Street’s 2024 EPS consensus estimates for Tesla have now come down 29% since the end of 2023.
Looking further out, Wall Street consensus has Tesla’s EPS in 2025 coming in at $3.70, down from the $5.29 projection 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 32 Composite Rating out of a best-possible 99. Tesla stock also has a 12 Relative Strength Rating and a 67 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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