Tesla (NASDAQ: TSLA) stock plummeted following reports indicating that the company plans to lay off “more than 10%” of its workforce worldwide.
Elon Musk, the CEO of Tesla, has communicated to employees via an internal email that the company is undertaking a thorough review of its operations to identify areas for cost reductions and productivity enhancements, as reported by The New York Times and EV-focused publication Electrek.
Tesla, a long-standing leader in the electric vehicle industry, experienced a significant stock surge last year as several other EV manufacturers adopted Tesla’s charging technology. However, Tesla has encountered challenges in 2024.
Earlier this year, Elon Musk expressed concerns during an earnings call about the impact of high interest rates on the margins of Tesla. He also shifted his focus to non-EV concepts such as AI robots and other products. This shift has raised concerns among Wall Street analysts, who fear that Musk’s attention to AI, X (formerly Twitter), and his other ventures like SpaceX might detract from his leadership at Tesla.
Tesla reported its first quarterly delivery decline since 2020 earlier this month. The dwindling demand for Tesla’s vehicles, both domestically and globally, is reportedly due to the escalating rivalry in the EV sector and volatile pricing. Last month, reports also surfaced indicating a reduction in production at Tesla’s Shanghai facility. This reflects the company’s acknowledgment of challenges in demand.
Investors are eagerly awaiting Tesla’s financial results for the quarter, scheduled for next week, to assess the impact of the decline in deliveries on its finances and to learn more about Musk’s plans, including the development of a fully autonomous “robotaxi.” Social media reports over the weekend also suggested a halt in Cybertruck deliveries as an accelerator issue is under investigation.
Tesla (NASDAQ: TSLA) Stock Price Action
TSLA stock plunged 5.59% to close at $161.48 on Monday. The traders had exchanged hands with 99,242,438 (99.24 million) shares compared to the average daily trading volume of 102.25 million.
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