Tesla stock extended its 2024 stock decline to 34% on Monday, with the stock dropping 3%.
Monday’s decline comes after the company said it would slash 10% of its staff amid weakening EV demand.
Tesla CEO Elon Musk said in a memo that there has been a “duplication of roles and job functions in certain areas.”
Tesla stock fell just over 3% on Monday, extending its year-to-date decline to 34% after the company laid off more than 10% of its workforce, or more than 14,000 employees.
Tesla CEO Elon Musk sent a memo to employees on Sunday, announcing that the EV automaker would eliminate jobs amid “a duplication of roles and job functions in certain areas.”
Two top executives at Tesla left amid the layoffs, including senior VP Drew Baglino, who led the company’s engineering for its batteries, motors, and energy products. Baglino worked at Tesla for 18 years and often shared the stage with Musk during product announcements and co-hosted company earnings calls.
The other departed executive is Rohan Patel, who served as Tesla’s VP of public policy and business development.
Usually, when a company announces job cuts, its stock price jumps, as investors applaud the cost-saving measures and anticipate higher profits in the future.
But Tesla’s stock decline following its round of job cuts is being met with caution on Wall Street, as the investor community grows increasingly concerned about weakening demand for electric vehicles.
Earlier this month, Tesla reported first-quarter deliveries that badly missed Wall Street estimates and represented the company’s first year-over-year quarterly sales decline since 2020.
“Inventory built up in 1Q and it appears that the primary driver of the softer delivery numbers was declining demand for electric vehicles across geographies, especially in North America, where EV sales volumes have been largely flat since the summer of 2023,” Bank of America said in a note last week.
For his part, Musk said in the memo that the job cuts will “enable us to be lean, innovative and hungry for the next growth phase cycle.”
This represents Tesla’s first large-scale job cuts since it laid off employees at its Buffalo, New York plant in February 2023.
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