(ConservativeJournal.org) – Tesla has announced a wave of layoffs totaling over 10% of its staff around the world. The internal memo viewed by Reuters dated April 15 suggests that the company is adapting to less demand than anticipated.
CEO Elon Musk called the layoffs a periodic reorganization and streamlining “for the next phase of growth” in a post on X. Battery development leader Drew Baglino and vice president of public policy Rohan Patel both announced their exit from the company on the same day.
Tesla’s global workforce had risen to roughly 140,000 people by late 2023, according to U.S. regulatory filings. CEO of Rex Shares Scott Acheychek called the reductions strategic, while Chief Investment Officer Michael Ashley Schulman with Running Point Capital Advisors called the reductions a “larger negative signal” indicating trouble at the electric vehicle (EV) manufacturer. Tesla reported a drop in global vehicle deliveries for the first quarter of 2024. This is the first time in almost four years that demand dropped.
CFO Zach Kirkhorn departed the company in August 2023, triggering concerns about succession. Tesla shares were down 5% on Monday as the market closed, at $162.42. Other EV manufacturers were also down by similar percentages.
Concerns about a potential $25,000 Model 2 Tesla EV are also fueling the drop in stock price. Musk said that Reuters was lying in an April 5 story wherein the famed media outlet suggested Tesla had canceled plans to produce the more moderately priced vehicle.
He’s also tickled investors with the announcement that the Tesla Robotaxi will be revealed to the public on August 8. The self-driving vehicle will still have to achieve regulatory approval and refine its core artificial intelligence to a near-perfect driving record before being commercially available.
Tesla may be in violation of German law for failing to give proper notice to the newly elected labor works council at their German plant regarding the layoffs.
Tesla is planning to start selling its EVs in India which has the world’s third-largest retail market for cars. Currently they are shopping around for showrooms and service providers and hope to start sales by the end of the year.
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