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Home Tesla announces mass global layoffs and shares melt on the stock market: Elon Musk cites collapse in sales and increased dispute with BYD, in the electric vehicle market, as the reason for cutting production and employees

Tesla announces mass global layoffs and shares melt on the stock market: Elon Musk cites collapse in sales and increased dispute with BYD, in the electric vehicle market, as the reason for cutting production and employees

19 April 2024 10 gies: 08
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Elon Musk's Tesla attributes employee layoffs to drop in global deliveries of electric vehicles due to fierce competition with competitors like BYD

Elon Musk's Tesla attributes employee layoffs to drop in global deliveries of electric vehicles due to fierce competition with competitors like BYD

According to the information reported by Valor Investe, Tesla announces layoffs of 10% of its employees. An internal memo from Elon Musk's automaker, leader of the electric vehicle manufacturer, cites the drop in sales and increased competition in the electric vehicle market, such as BYD, as the reason for the layoffs. The total number of employees impacted by the measure was not disclosed.

Elon Musk mentioned the need to cut costs at Tesla. According to an anonymous source familiar with the matter, some layoffs have already been communicated to employees.

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Elon Musk's company had 140.473 employees globally by December 2023

In the memo, Musk highlighted that it is time for the company to take measures to achieve financial balance and prepare for the future. “As we prepare the company for our next phase of growth, it is extremely important to analyze all aspects to reduce costs and increase productivity. As part of this effort, we carried out a thorough analysis of the organization and made the difficult decision to reduce our headcount by more than 10% worldwide,” said Elon Musk in a memo sent to employees.

According to Tesla's latest annual report, the company had 140.473 employees globally as of December 2023. The automaker has not yet issued an official statement on the cuts.

Competitors like BYD negatively impacted Tesla's financial results

After register the first fall in global electric vehicle deliveries in the first quarter of 2024 in nearly four years, Tesla announces layoffs. The automaker attributes the decrease to price cuts, necessary due to strong competition with competitors such as BYD, which negatively impacted financial results.

While electric vehicle sales continue to gain popularity globally, the growth rate of these sales has slowed, especially for Tesla. The company delivered about 387 vehicles in the first quarter, representing a drop of almost 9% from the previous year and falling about 20 units below Wall Street's lowest estimates. This disappointing result came weeks after Tesla reduced production at its Shanghai facility in March.

In the final quarter of last year, the gross profit margin was just 17,6%, the lowest in more than four years. Elon Musk acknowledged that the company expects a slowdown in 2024, after a period of rapid sales growth.

Tesla shares (TSLA34) fall 5% with layoff announcement and accumulate losses of more than 30% for the year

Tesla shares closed down more than 5% on Monday on the Nasdaq, following the announcement that Elon Musk's company will lay off more than 10% of its global workforce, representing at least 14 employees. . The Nasdaq index registered a drop of 1,79%, closing at 15.885,02 points. With Monday's trading, Tesla shares are down more than 30% for the year.

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