🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Elon Musk pushed for 20% headcount reduction in Tesla- Bloomberg

Published 22/04/2024, 02:44 pm

Investing.com-- Elon Musk had pushed for a 20% headcount reduction in Tesla Inc (NASDAQ:TSLA), Bloomberg reported on Sunday, citing a source close to the EV maker’s CEO as it undertakes a pivot into autonomous vehicles following a drop in deliveries. 

Tesla had last week trimmed its workforce by over 10%, eliminating at least 14,000 jobs. But Bloomberg’s report said that the actual number of reductions could be more than 20,000 roles. 

The sharp reduction in headcount comes at the heels of what analysts described as a  “nightmare” quarter for Tesla. The world’s most valuable electric vehicle maker clocked its first decline in quarterly deliveries in nearly four years.

Deliveries fell about 20% in the first quarter of 2024 from the prior quarter- a figure which had also factored into Musk’s call for a 20% headcount reduction, the Bloomberg report said.

The drop was driven by increased competition from Chinese EV makers, as well as softening EV demand in U.S. and European markets.

The EV maker is now looking to pivot heavily into robotaxis and full self-driving software. Musk claimed on social media that Tesla’s first robotaxi will be revealed in August this year. 

Development of a robotaxi is also reportedly taking precedence over plans for a cheaper EV model, which analysts and investors had hoped would help revive sluggish sales for the company.

But Musk has been touting the idea of a robotaxi for nearly eight years now, while Tesla’s FSD software- the name of which is regarded as a misnomer- has landed the EV maker a myriad of lawsuits over safety concerns. 

Production issues with the recently-launched Cybertruck also battered sentiment towards Tesla. The company had last week recalled the nearly 4,000 Cybertrucks it had sold so far to fix a faulty accelerator pad- which locked the vehicle into 100% acceleration and presented a major safety risk. 

Dropping sales, doubts over its FSD pivot and uncertainty over Musk’s priorities saw Tesla lose 39% in market capital so far in 2024- nearly half a trillion dollars.

The stock took little support from its headcount reduction, while price cuts in its EV models and FSD software over the weekend only presented more margin pressure on the company.

Tesla is set to report its first quarter earnings on Tuesday, and is expected to log a sharp decline in its operating profit. Tesla is also expected to clock its first revenue drop in four years.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.